U.S. Leadership in Manufacturing: A Symposium at the Eighteenth Annual Meeting, November 4, 1982, Washington, D.C., National Academy of Engineering. (1983)

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INTRODUCTION Gordon H. Millar This session will build on what we heard this morning and will examine the whole concept of the integrated manufacturing system. For years and years we looked at manufacturing as a means by which human effort was used to convert material and other resources into a finished product. The concept of manufacturing is broadening today, so that manufacturing includes the concept of the product, its design, its manufacture, and its delivery to customers—a total reiterative, closed- loop process that ends up with substantially improved utilization of resources in order to refabricate in North America the competitiveness of manufacturing that built this nation. 9l

CHANGING CONCEPTS OF THE MANUFACTURING SYSTEM Joel D. Goldhar and Donald C. Burnham INTRODUCTION Computer-aided design and computer-aided manufacturing (CAD/CAM), robots, international competition, productivity, "working smarter," quality—these are key words today in the newspapers, trade journals, and popular magazines. All who read, or watch TV, are to some degree aware of the challenges facing U.S. indus- try, the technological frontiers of manufacturing, and the pervasive application of computers to every conceivable work task.1 They are also constantly reminded of the human problems, workforce dislocations, and potential unemployment associated with increasingly sophisticated and more prevalant competition and automation. Few, however, fully understand how the new technology, worldwide competi- tion, and changing customer demands are combining both to require and to make possible new styles of competition, greater attention to customer requirements, and new-concept factories of the future. These factories will be capable of delivering levels of efficiency, speed, variety, quality, and reliability not possible using the last generation of production technology, organization, and strategy. Our paper will examine the way that this new generation of mechanical technology, computer-based information systems, and electronic process controls creates the factory of the future. Further, we describe how these advances will fundamentally change the economics and operating characteristics of the tradi- tional piece-parts and assembly factory and, indeed, the organization and competitive strategy of the entire company. A recent article in the Wall Street Journal called this change in technology a revolution and outlined its impact:2 A revolution in manufacturing is completely transforming the economics of production. It is doing so by reducing the cost penalty of product diversity. Within companies, the traditional conflict between marketing, which wants to offer customers more models, and the factory, which has wanted to limit product line variety for the sake of production efficiency, is becoming a thing of the past. . . . Setups that used to take hours can now take minutes as a result of new, sophisticated machine tools and microprocessor control and sensory technologies. The faster setups are the key to collapsing the structure of downtime, inventory and overhead cost that plagues the conventional factory.... 92

93 The marketing and competitive implications of these new plant economics are powerful. Because product variety costs less now, there will be more of it. ... Shorter setups increase effective plant capacity and reduce the cycle time it takes for the complete model mix to move through the factory. This allows the manufacturers to increase their model range in finished goods stock and keep their delivery lead time constant without raising their inventory costs. . . . Full-line producers with smaller market shares may suffer less manufacturing disadvantage than before. . . . The strategic payoff from the investment lies in marketing and in better control of competitors. Shorter setup times enable a company to serve distribution channels better and to capture, at acceptable cost, higher-price, low-volume products. Broad-line producers everywhere will have to reckon with these new economics of diversity. TRENDS Before discussing the technical aspects of computer-integrated manufacturing (CIM), we need to examine the trends in the economy today that are the driving forces behind the need for change:3 • Computers are increasingly used to perform the paperwork of all manu- facturing tasks as well as process control. • Products are being designed for "manufacturability" as well as product function. • Flexible automation is starting to replace fixed automation for the manu- facture of families of similar parts in a single factory. Batch processes are being replaced by continuous flows of parts and information. • Robots and automatic handling equipment are making computer-controlled machines into completely automated work cells. • Individual work cells are starting to be tied together by the computer into a manufacturing system. • The cycle time through the manufacturing process is being shortened and work-in-progress inventory is being drastically reduced. • Consistent high quality is being recognized as a productivity and cost improvement. • Product life cycles are becoming shorter and new product designs more frequent. • More sophisticated customers are demanding high quality and some degree of uniqueness in the products they purchase. • Many products are becoming more complex and technologically sophis- ticated with each succeeding generation, thus requiring more sophisticated and complex manufacturing techniques and systems. All of these trends affect to some extent all businesses and their manufac- turing systems—from chemical process plants and oil refineries, to assembly lines for automobiles or appliances, to batch systems for clothing and machine tools, to one-at-a-time specialty fabrication shops. Of particular interest to us are the ways the application of computer and information technology to manufacturing has changed all types of production, but the greatest observable impact is on the

traditional batch-process factory that today uses people, stand-alone machine tools, or other unit operations and assembly lines to produce small to medium quantities of a variety of components and finished goods. These are gradually becoming continuous process systems as the computer and new mechanical technology increase the speed of throughput while reducing the time gap between successive units of output. All manufacturing systems begin to approach the operating characteristics of a chemical planl; however, the economies in the production of products based on mechanical technology will come from the variety and flexibility inherent in computerized information and process control systems. Manufacturing, like chemical processing, is becoming a "high-science" activity. Several key scientific trends underlie the major advances in manufacturing technology described above: (l) We are gradually gaining a fundamental under- standing of how solid materials behave and change under process conditions; (2) measurement science and technique and control theory applications are advancing rapidly, allowing us to control physical processes; and (3) artificial intelligence offers great promise for the next generation of advances, even over the increas- ingly sophisticated information science in use today. INTEGRATION: KEY TO THE FACTORY OF THE FUTURE The new-concept manufacturing system is at its most powerful when our increased knowledge of material and process behavior and improved measurement techniques are used with the computer to control and integrate all of the production process operations with systems for managerial control of the factory and a wide range of corporate business functions. This is commonly called computer-integrated manu- facturing (CIM) and is generally what we mean when we refer to a factory of the future. CIM can best be defined as: the combination of hardware, software, and data base and communi- cations to provide: l. On-line variable program (flexible) automation 2. On-line moment-by-moment schedule and performance optimization 3. Closed loop control of material flow and operations 4. Dynamic coordination and reallocation of resources The computer makes it possible to analyze and describe the unit operations or unit processes of manufacturing, to utilize sensors to ascertain process conformance with analytical predictions, and to optimize and adapt performance with feedback and control mechanisms.* The range of business and production functions that can be integrated with manufacturing is shown in Table l. Table 2 illustrates the flow of information within the total manufacturing system. The technologies making CIM possible are smart machines, sophisticated sensors, flexible and multipurpose tools, a common engineering and manufacturing data base, process-control information encoded in software rather than built into

95 TABLE l CIM: Total Manufacturing Integration CIM Business Planning Functions Forecasting Long-term (master) production scheduling Intermediate production scheduling Bill of materials processing Material requirements planning Finished parts, raw material inventory control Purchase order processing/followup Receiving, inspection, recording Invoicing Accounting Short-term production scheduling CIM Business Execution Quality control Short-term schedule execution In-process inventory control Production tracking Materials handling Inspection and testing Production monitoring Work station control SOURCE: Scott M. Staley and Mohamed O. Ezzat, "CIM: Total Manufacturing Integration," CAD/ CAM Technology, Spring, l982. the hardware of machines and material movement systems, and the use of com- puters to automate the "knowledge work" of manufacturing and to integrate production planning and control and shop floor control with similar automated systems for accounting, purchasing, logistics, personnel, and other business functions.5 The result can be a factory of the future that is computerintegrated, close coupled, continuous flow, paperless, and highly flexible. It can economically and efficiently produce a wider variety of products in smaller batches than is now feasible. Lead times for new product introductions or improvements will be drastically reduced; work-in-progress inventories will practically disappear; costly final goods inventories used to buffer the factory from the uncertainties of the marketplace will not be necessary; and both direct and indirect labor will be substantially reduced. IMPACT ON THE FACTORY Following the analogy to a chemical plant and the logical consequences of the changing economies of production described by Hunt and Stalk in their Wall^

96 TABLE 2 CIM: Total Manufacturing Integration CIM Manufacturing Management Direction of Information Flow Business Planning and Support Economic simulation Long-term forecasting Customer order servicing Engineering Design Computer-aided drafting Computer-aided tool design Group technology CAD Manufacturing Planning Process planning systems Parts programming NC graphics Tool and materials catalog Material requirements planning Production line planning simulation Bill of materials processors Machinability data systems Computerized cutter, die selection Materials/parts inventory management Manufacturing Control Purchasing/receiving Shop routing Methods and standards In-process inventory Short-term scheduling Shop order follow system Shop Floor Monitoring Machine load monitoring Machine performance monitoring Man-time monitoring Materials/stores monitoring Preventive maintenance In-process quality testing Process Automation NC, DNC, CNC Adaptive control Automatic assembly Automatic inspection SOURCE: Scott M. Staley and Mohamed O. Ezzat, "CIM: Total Manufacturing Integration," CAD/CAM Technology, Spring, l982.

97 Street Journal article, we can suggest a number of design characteristics that will differentiate the factory of the future from traditional manufacturing. They are: • High fixed costs approaching l00 percent • Product design and process control information encoded in machine readable form • Tools, machine "centers," other process and assembly operations, and material movers that are all flexible, adaptive, multifunction, and smart • Low-cost intelligence and memory hardware These four characteristics—fixed costs, machine readable information, smart tools, and cheap computing—lead to a factory that behaves in a different fashion. It will exhibit: • A relatively flat learning curve for a specific product configuration after the software is debugged. Emphasis shifts to an "experience curve" for a family of similar products over time • Short-run average costs that approach the long-run average The CIM factory will have computerized production planning and control systems (the "paperless factory") and computer control and integration of all manufacturing operations, production management, engineering, and business activities. We will see relatively few, but highly skilled, human beings who in their operating mode will resemble airline pilots with responsibility for the operation, according to plan, of a complex technological system. Engineers and managers will need to adopt a systems emphasis in place of their traditional unit operations thinking. New analytical tools for analyzing and optimizing factory design and operations in advance of actual commitment to capital expenditures will be readily available. These new-concept plants will have high levels of investment in software and in computer programming, operations, and main- tenance capabilities—perhaps greater than their investment in machines. The economic basis for the CIM factory is economy of scope that allows for low-cost variety in addition to the usual economy of scale resulting from aggre- gation of resources. Economies of scope exist when multiple products can be more cheaply produced in combination than separately; i.e., when the same equipment can produce multiple products (or at least variations on a theme in a family of products), the potential for economies of scope exists. For example, a computer-controlled machine tool with a tool changer does not "care" whether it works on a dozen units of the same design in succession or a dozen different product designs in random sequence (again, within the range of a family of designs—but that range gets broader with each new generation of tools). The changeover time and cost are almost negligible, since changeover involves simply reading a different computer program with electronic speed. The variable costs of product-line breadth move "back" to the design process, where computer-aided design systems are increasing engineering productivity by orders of magnitude. In a sense, the traditional idea of economy of scale is now vested in the design and engineering effort. Economies of scope directly affect such decisions as length and breadth of the product line and the types and amounts of inventory in the production- distribution-delivery chain. This in turn leads to a switch in emphasis from minimum cost to maximum competitiveness, with objective functions for manufacturing that emphasize:

98 Minimum changeover costs and time Maximum flexibility and quick turnaround capability Minimum downtime for maintenance Maximum product "family" range Ability to adapt to variability in materials and process conditions Ability to handle increasingly complex product designs and technology Ability to integrate new process technology into the existing system at minimum cost These are the new variables by which we will evaluate the factory of the future. That is, we will look for a factory's ability to provide a competitive weapon for the market environment of the future in place of the narrow focus on cost per unit that has led to long runs of standardized products that no one seems to want to buy. Given these characteristics we can gain an overall concept of the CIM factory if we consider it as a combination of the following three ideas: l. A continuous flow of product—as in a chemical plant—but with economy of scope allowing the production of a variety of similar products in random order in addition to the economy of scale derived from overall volume of operations. 2. A computer system with machine tools, robots, and other process equip- ment as the "peripherals" in place of printers, plotters, terminals, and disc packs. The organization, management, maintenance, and operating problems of the new concept factory will closely resemble those of our computer systems. The ongoing discussion of the pros and cons of centralized vs. decentralized production facili- ties and product vs. process factory focus are exactly analogous to the centralized vs. distributed computing and data processing argument; indeed, it is the same technology. 3. A response to the demand for greater variety, customized designs, rapid response, and "just-in-time" delivery. We are gradually switching from the production of large volumes of standard products on specialized machinery to systems for the production of a wide variety of similar products in small batches (perhaps as small as one). These small batches will be produced on standard but flexible machines that are reconfigured by their software to the required process for each different product design. These combinations of computer systems and chemical plants with their attributes of scope, flexibility, close coupling, control, and speed will allow U.S. industry to respond profitably to market pressures for increased variety and customization of products, close-coupling/minimum-inventory linkages between suppliers and customers, greater variety in consumer goods, increased reliability and quality, and the "demassification" of the marketplace as described by Alvin Toffler in The Third Wave.' However, making effective use of this technology will require new marketing styles and corporate strategies emphasizing rapid design change, variety and customization of products, and new techniques for the design and management of factories that take into account the unique features of computer-integrated manufacturing. We also need to rethink all of our traditional concepts of factory organization, plant layout, facilities location, choice of process technology and equipment, production planning and control techniques, standardization of product designs, size of batch or length of run, line vs. staff responsibilities, the means for

99 introducing new technology into existing systems, measures of productivity and performance, training and required skills of managers and professionals, and so on. A major research effort is needed to determine which tools and techniques will remain the same, which will disappear, and how others can be modified to be useful in managing the computer-integrated factory of the future.7 This leaves us with a factory whose operating characteristics are very dif- ferent. For example: • Economic order quantity (the batch size for cost-effective production of a particular product design) will approach l. • Variety will have no cost penalty at the production stage. • Costs per unit will be highly sensitive to total production volume because fixed costs will approach l00 percent. • Joint cost economics will be the rule—the value of the system will be a function of the "bundle" of products it produces, and the marginal cost of a particular product will be difficult, if not impossible, to calculate. • Rapid response to changes in product design, market demand, and pro- duction mix will not only be possible, they will be required. • Nearly unmanned operation will become the norm, much like the chemical plant. • Close-coupled and highly integrated production systems will be used, as well as supplier-user linkages, resulting in minimal inventory levels and little slack for errors in timing or judgment. • Consistent high levels of quality and process accuracy and repeatability will introduce higher levels of certainty into the production planning and control activity allowing for higher levels of process optimization. • The managerial emphasis will be on extensive and expensive preproduction activities to eliminate errors and bugs before the machine goes into action. • Traditional line management responsibilities will move toward staff and engineering activities. SOME EXAMPLES These characteristics can already be seen in operation to a greater or lesser degree in a variety of real production environments. These are mostly stand- alone modules or partial factories, but there are also a significant number of true CIM systems reported in the literature. The evidence for expecting this tech- nology to perform as advertised is now too great to ignore. It only remains for American industry to make a commitment to a revolution in its manufacturing technology. The factory of the future is no longer always in the future.8 Current examples include the following: • At Messerschmitt-Bolkow-Blohm (MBB) in Augsburg, West Germany, the most advanced flexible manufacturing system (FMS) in the world has been in full operation since l980 to machine titanium and other materials into components for the Tornado fighter aircraft. Twenty-four machining stations fed by robot carts are controlled by a single large computer that also manages storage, supply, and removal systems for tools, workpieces, and fixtures. At a cost of about $50 million the total system has cut lead times 26 percent, reduced the number of

l00 machines by 44 percent, and has cut floor space requirements by 39 percent, personnel by 44 percent, and total annual overall costs by 24 percent compared to a traditional system. The machines in the FMS cut metal 75-80 percent of the time, in contrast to the l5-30 percent typical of stand-alone machines. The lead time for the Tornado is l8 months, compared to 30 months for an equivalent air- craft in a conventional system. Finally, the required capital investment was 9 percent less than would be needed for a conventional system. (Reported in Amer- ican Machinist, March, l98l and Innovative Manufacturing Technology, a position paper of the American Association of Engineering Societies, January l982.) • A Swedish household appliances company invested in a robot line for parts manufacturing with the following results: Conventional Line Robot Line Number of operators 28 6 Floor space l700 m2 300 m2 Lead time 3-4 weeks 4 minutes Investment costs $60l,200 $l,l35,600 Savings through shorter $ l20,250 lead-time Pay-off time l.5 years (Reported in the Promotion of Robotics and CAD/CAM in Sweden, Ministry of Industry, October, l98l.) • Lockheed-Georgia Company is currently installing an advanced DNC machine tool system that will include quality assurance, maintenance, and shop floor control functions. It will manage 60 NC tools of various types and will collect performance data from between 20 and 200 sensors on each machine tool. These diagnostic sensors will allow machine parameters such as coolant temper- ature, vibration, spindle speed, motor coating, cutter wear, and cutting tool temperature to be monitored constantly in order to predict when a machine will fail. This system sets the stage for real-time control of the machining process at a future date (Metalworking News, June l4, l982). • A new machining system being installed at the Oldsmobile diesel engine plant in Delta, Michigan, is an unusually flexible 22-station palletized transfer machine for making connecting rods. The system will produce connecting rods suitable for either V-8 or V-6 gasoline engines or the thicker and heavier con- figuration required for V-8 or V-6 diesels. The system can turn out up to 670 parts per hour and has the ability to repair its own parts. Off-spec parts can be recycled through the system a second time (Metalworking News, January l9,l98l). • In Nagoya, Japan, the Yamazaki Machine Tool Company operates two fully automated machine lines served by computerized self-propelled carts, an auto- mated pallet storage system, and overhead units that automatically replace tool changer magazines when necessary. Yamazaki reports spending about $l8 million on the installation and expects to recover $3.9 million in labor cost savings and $3 million in reduced work-in-progress inventory in the first year of operations. The system of l8 machine tools, l2 persons, and 30,000 ft2 of space turns out a mix of 74 different products in l,200 variations. In contrast a comparable manually controlled system would require 68 machines, 2l5 persons, and l03,000 ft2 of space to do the same job. Yamazaki has opened a similar plant to produce its line of

l0l automated machine tools in Florence, Kentucky, in the near future (Metalworking News, October 26, l98l, and December l4,l98l). STRATEGIC IMPACTS The future is already here—at least in pieces—and we can expect an acceleration of the rate of technological change.9 The challenge lies in developing new tech- nology, having the will to apply it effectively to existing manufacturing systems, and managing the new plants for effective competition. This requires a new approach to competitive strategy, new organizational designs and manage- ment procedures, different techniques for capital investment decision making, and broad-thinking and innovative managers able to cope with increasingly science- based process technology, rapid change, and new kinds of corporate strategy. The CIM factory will require competitive strategies that build upon the strengths inherent in the technology. These strategies will include deliberate efforts to: • Proliferate the product designs • Truncate the life cycle • Use distributed processing locations closer to customers • Emphasize quality and reliability as a measure of value • Customize products to users' specifications • Fragment the market into segments that are too small to support tradi- tional facilities or allow "cherry-picking" marketing tactics by competitors • Provide a variety of product lines to a broad range of market segments • Increase the rate of change in product design and product complexity • Develop the strong engineering and distribution capabilities required to implement computer-integrated manufacturing as the distinctive competence of the firm • Develop a rapid response capability to take advantage of changing market demands and/or competitor lapses All the above are to some extent counter-intuitive because they are contrary to the strategies that worked well when factories used traditional hard-tooled automation. Some markets and products will still support traditional dedicated automation and traditional strategies using "long runs of standard products to get down on the learning curve and be the cost leader." The trend, however, will be toward broader, more fragmented markets and rapidly shifting demands that require both the new-concept factories and the strategies that justify their investment. MANAGEMENT STYLE AND ORGANIZATIONAL IMPACTS These new strategies will also require that we adapt our organizational structure and management styles to accommodate a more innovative and free-wheeling operation.10 In particular the trends will be as follows: • Fewer, higher skilled, better paid, more autonomous people will require new policies for training, motivation, and rewards.

l02 • The responsibility for productivity and profitability will shift from line to staff. • Manufacturing technology decisions that are treated as corporate strategy issues and, conversely, a carefully articulated and widely disseminated corporate strategy will be required in order to obtain the full benefits of the computer-integrated factory. • We will see long time horizons for planning; better and more integrated R&D, production, and marketing planning; and new algorithms for capital bud- geting that emphasize benefits derived from new ways of doing things and doing things that have not been possible with the traditional factory. The issue is not the return on investment of a CIM. The questions are "What will be my competitive position and the return on investment of the firm as a whole in 5 or l0 years if I do not make these investments today? What if I do and make the necessary strategic changes?" • New concepts in industrial engineering for decisions on factory organi- zation and layout, capacity and location, optimization techniques, and production planning and control will appear. All of our traditional industrial engineering techniques will need to be rethought in the light of economy of scope, joint cost economics, and the technology of computer-integrated manufacturing. • The new manufacturing capabilities of variety, rapid responsiveness, and flexibility will become a basis for new marketing tactics. Marketing theories based upon assumptions inherent in traditional manufacturing technology need to be reconsidered. Concepts such as market segmentation, product positioning, and penetration vs. skim pricing may well change or even disappear in the light of factory-of-the-future capabilities. • New styles of manufacturing management will be required. The manufac- turing executive of the future will be more concerned with integration, innovation, and strategy and will spend less time dealing with the traditional tasks of people, materials, and flow control. • Thinking at both the corporate-strategy and manufacturing-function levels will shift from manufacturing as an afterthought to manufacturing as a competi- tive weapon, and from a narrow focus on productivity to a broadly defined manufacturing-based approach to profitability and competitiveness. In summary, the computer-integrated factory is based upon machine-readable data on product and process characteristics; operating specifications based on an ever more sophisticated understanding of material behavior and control theory, paperless management systems; and smart and flexible tools, material movers, and other processes that are integrated with production management and business systems through a communications network and a common data base. This leads to a close coupling between manufacturing engineering and marketing and levels of variety, flexibility, quality, and reliability not possible with traditional technology. All of the above are necessary for the true factory of the future. Islands of automation and stand-alone computer-based information systems can and do exist and will contribute to improved productivity. However, the real benefits come when all of the above conditions are met—the whole is greater than the sum of its parts, and its value is a function of the strategy for its use. The key messages are:

l03 • The new factory technology, especially computer-integrated manufac- turing, is fundamentally different in economics, design, and operations from the equipment, processes, and technology we grew up with in traditional factories. It is based on a higher level of scientific understanding of material and process behavior, has a higher level of predictability than ever before, and utilizes modern electronic technology and sophisticated software in every facet of its operation. It not only does old tasks faster or cheaper or more accurately; it can do them differently and it can perform tasks not possible in the traditional factory. Therefore, many of the opportunities, management styles, strategic options, and production management decisions will be counter-intuitive to experience based upon past successes. • The impacts of this new manufacturing technology and capability will be pervasive throughout a given company. It will open up new styles of competition in the marketplace and will require major adaptation by research and engineering, distribution, and marketing as well as new organizational structures, different economic analysis and investment justification techniques, better trained people, continuous flow systems, new styles of manufacturing management and, most of all, a corporate-wide, top-down, strategic commitment to its introduction and utilization. • The new production technology and operating style offer an opportunity for U.S. manufacturing to regain its leadership in the world market for manufac- tured products. NOTES '"The Mechanization of Work," special issue of Scientific American, September, l982. 2T. M. Hunt and G. Stalk, Jr., "The Big Revolution" in "Manager's Journal," Wall Street Journal, July l2, l982. ~ 'See, for example, "Now the 'Star Wars' Factory" in Time, November 2, l98l, p. 74; "The 'De-massification' of Industrial Society—An Interview with Alvin Toffler," Business Week (Industrial Edition), April l4,l980, p. l22B-l22H; E. Ginzberg, "The Mechanization of Work," Scientific American, September, l982, pp. 66-75; and many other articles in Business Week, Fortune, etc., too numerous to catalog here. *"Innovative Manufacturing Technology," a position paper by the Coordinating Committee on Innovation and Productivity, American Association of Engineering Societies, January l982. 'For further discussion of the technology, see H. Thompson and M. Paris, "The Changing Face of Manufacturing Technology," Journal of Business Strategy, Fall l982; N. Andreiev, "Computer Aided Manufacturing—A Stepping Stone to the Automated Factory," Control Engineering, June l982, p. Slff; E. J. Lerner, "Computer-Aided Manufacturing," IEEE Spectrum, November l98l, p. 34f f; or P. Kinnican, "Computer-Aided Manufacturing Aims for Integration," High Technology, May/June l982, p. 49ff. • A. Toffler, The Third Wave, New York: William Morrow, l980. 7R. Kegg, Jr., The Batch Manufacturing Factory of the Future, Cincinnati Milacron, Inc., unpublished manuscript.

l04 *W. Skinner, "The Factory of the Future: Always in the Future?—A Managerial Viewpoint," in Towards the Factory of the Future, L. Kops (ed.), New York: ASME, l980. 'D. E. Wisnosky, "How Far Can You Go? The Integrated CAD/CAM Factory," paper presented to the Financial Post Conference, Ottawa, Canada, February l7, l982. 10 For a very readable discussion of the managerial and organizational issues, see "The Promotion of Robotics and CAD/CAM in Sweden," Report from the Computer and Electronics Commission, Stockholm: Ministry of Industry, l98l (paper presented at the OECD 2nd Special Session on Inflation Technologies, Productivity and Employment, Paris, October l9-20, l98l). The issue of appropriate economic analysis techniques is covered at great length in B. Gold, NRC Committee on Computer-Aided Manufacturing, Improving Managerial Evaluations of Computer-Aided Manufacturing, National Academy Press: Washington, D.C., 1981.

INTEGRATION OF THE MANUFACTURING SYSTEM James E. Ashton The emphasis in the Burnham and Goldhar paper was on the kinds of changes that will be required to take advantage of the factory of the future and that we are going to have to understand that factory and what kind of things we need to do to use it advantageously. I believe their observations are appropriate. My com- ments, however, concern what I believe is the biggest challenge facing American manufacturing management—the adoption of a managerial style and approach not only to understand and adapt to those changes but to adapt to the whole evolu- tionary process that is going to go on from now to some time in the distant future. We are indeed not going to get there through a revolution but, rather, through evolution requiring continuous change. To illustrate my views, I will use my particular experience with the Fort Worth Division of General Dynamics. I spent about five years in manufacturing there; the last couple of years as Vice-President of Production. I was there from the time when the first assembly fixture for the first F-l6 was loaded until ap- proximately the delivery of the 200th plane. The Fort Worth Division of General Dynamics operates Air Force Plant 4, a facility with approximately 6 million square feet of usable floor space. The product, the F-l6, has about 9,000 different parts made in-house, plus an even greater number of procured and installed items. The manufacturing process involves all sorts of machining, sheet metal fabrication, electrical and electronic work—almost every process you can think of—and then the subassembly, assembly and test, checkout and delivery. In summary, this experience involves a complex facility producing a sophisticated end product. This is the same plant in which the F-l ll was built. To provide a frame of reference concerning the achievements and changes we introduced, comparison between the present results (F-l6) and the previous results (F-l ll) is provided in Figure l. A reasonably good way to compare two very different airplanes is in man- hours per pound, and Figure l charts manhours-per-pound performance of the parts of the airplanes built within the Fort Worth plant. It is as close to an "apples-to- apples" comparison as I can reasonably make, and it indicates the results with actual values for the first 200 airplanes. Figure l also provides another curve which takes the F-l ll results and, since it was built in the same factory as the F-l6, applies the cost-estimating relation- ships one would normally use to correct for the fact the F-l6 is a smaller air- plane. Generally, manhours per pound go down as the airplane gets larger, and cost estimators have empirical equations relating these parameters. If the F-l ll l05

l06 F 111 Actuals F 16 Predicted Performance F 16 Actuals 6 8 10 40 60 100 200 AIRPLANE NUMBER FIGURE! Production performance: F-l ll and F-l6. data is converted to what one would expect for the F-l6, one gets something like the top curve in Figure l. As indicated, at the l00th airplane (where, hopefully, the chatter in start-up and various design changes and test problems start to go away) the actual F-l6 result of about four-and-a-half manhours per pound com- pares quite favorably with either F-l ll actual values or the projection. We built the F-l6 airplane for about half as many manhours as expected in the same basic facility as the previous airplane was built. How did we do it? A lot of reasons are offered by people. A program called Tech-Mod started with the F-l6 program and has received a lot of publicity. It was a program that has been very successful. Others point to the investment in new facilities, and indeed we invested in many new facilities. In the area of new technology, we introduced robots and other new processes. People point to those things and conclude: "Ah-haJ All we have to do is spend some money on R&D, and we spend some money on facilities, and look what wondrous things we accomplish." Those things are indeed important, but let's put them in some perspective. In the process of getting to the 200th airplane, we had invested, in terms of capital facilities and rearrangements, no more than $50 million in a plant whose replace- ment cost, very conservatively, is at least $l billion. It is a little hard to believe that $50 million, or a 5 percent change in the capitalization of a plant, is going to produce the sort of results that we achieved.

l07 We also introduced much new technology. We changed many things, and these changes received extensive national publicity, things such as the first robot in an aircraft production environment. I believe that is the most pictured robot that has ever been made. It has been publicized in many magazines and it was very successful. However, at the 200th airplane, we had three robots replacing six people in a plant with 8,000 production workers. We introduced photogrammetry and a very modern CNC-DNC system linking together some major new numerically controlled machines. They were very helpful and quite cost effective. We introduced computerized inspection. Each of these items was helpful, but they all were, in summary, not nearly enough to explain the curves of Figure l. We also changed the management information and control systems, work-in- process systems, inventory control systems, and ordering systems. We upgraded these from l960 systems to late-l970 systems, and these improvements were very helpful. However, basically, not one of these things, or even the collection of these improvements in a narrow sense, could possibly explain the level of manhour differences we achieved on those learning curves. One explanation for the favorable results is that we did a lousy job previously—but even then, why did we suddenly do a better job? The answer comes down to the fact that we changed something else that was probably the most important part of the process. We changed the management style and the belief in what we were doing away from what has become kind of a classic manufacturing management style. In this country, we have come to believe that change is bad in manufacturing, that change is disruptive. "If the damned engineers would quit changing the product, we would be better off. We bring in a new machine and it always disrupts things. Change is bad, and if I can just get to Utopia when there is nothing changing, we are going to be very efficient." We have designed our management style and systems for that time when nothing changes and, unfortunately, that time will never be here. In fact, we do not want it to be here. The Japanese style (which was not necessarily consciously developed) is rather different and tends to be one receptive to the idea that they are going to keep changing things. We are not going to get to the factory of the future that Goldhar and Burn- ham described and then stop changing things. We are going to evolve and change and change and change. The list below provides a qualitative comparison of management styles. The style on the left might characterize what was previously in place, and the style on the right is what we introduced. Also, the style on the left might be characterized as a management environment that is appropriate for a steady state, and the style on the right one that is appropriate when a high rate of change is expected and desired. Manufacturing Management Autocratic vs. Team Management Short-term results vs. Long-term view Management Science vs. Art of Management By the numbers vs. Judgment Fire fighting vs. Planning and control Keep it working vs. Improve it

l08 In terms of the first comparison, autocratic versus team effort, getting everybody together to work on what needs to be done is a lot more effective if things are going to be changing. On the other hand, in a steady-state situation, a "big whip" works quite well. Similarly, in a static environment, you can concen- trate on short-term results; however, if you really want to keep changing things, every change is going to be at least a little bit disruptive, and you have to take the long-term view to capitalize on those results. Those who believe in management science and doing it by the numbers will be driven to a lot of short-term things, worrying about what will happen for the next quarter. They will not make those subjective long-term changes. On the other hand, thinking of the management process in manufacturing as an art and using judgment to determine the things that will really improve the place (in spite of the short-term disruptions and problems) is conducive to innovation and to taking on new approaches (the unknown). When a system is designed to be really great when nothing changes and then changes are introduced anyway, you end up fire fighting all the time. If you reward management for excellence in fire fighting, the cycle will be repeated continuously. If, instead, you believe the name of the game is to keep changing things and to do it under control, emphasize planning and control and avoiding the fire. Similarly, if instead of the emphasis on "keep it working" you emphasize improving it, then there is a good change you will keep changing things, and if you can change and change and change, eventually you will be a lot better than you were before, in spite of the continuous disruption you will have with each of the new changes introduced. To introduce the kind of manufacturing technologies we have been discussing at this session, and to move toward that factory of the future, a management style that adapts to this whole evolutionary process is critical. If we do not adapt such a style, then we are not going to succeed. Somebody, be it the Japanese or other American plants, will outstrip us. We need to develop a philosophy and style consistent with the idea that change is absolutely necessary. It is, in fact, good, and it is going to go on forever.

AUTOMATION IN SEMICONDUCTOR MANUFACTURING Robert P. Clagett In my opinion the microprocessor, which comes from the semiconductor industry, has had the greatest influence on today's automation. As the power of the micro- processor has been increased to match that of computers of the past, and as its cost has become lower and lower, it has had a major influence on automation. This influence has come about in two ways. The first is in controlling an auto- matic process. Automatic processes used to be controlled either mechanically or with dedicated electrical apparatus. With the advent of smaller computers, large automation began to be controlled by computers, and today the microprocessor controls most new designs of automation. The reason is that the control can be done cheaply, accurately, and most importantly, flexibly. By reprogramming, the automation can be made to modify or even change the process. The best example we have is controlling a robot. It was not until microprocessors became powerful enough and cheap enough that the robot really became economical for wide application in industry. The second way in which the microprocessor has influenced automation has been to use the information pertaining to the operation it controls, which can be remotely accessed by a larger processor overseeing a whole product line in which many automatic processes are linked together. Not only are automatic processes linked together in this fashion, but test equipment can also be microprocessor- controlled and therefore linked to the rest of the automatic system. And, of course, the transport systems now being designed into many automatic processes can also be controlled in the same way. The result is that a large amount of information can now flow from the individual process, from test stations, from the transport system, all controlled by a larger processor interconnected and exchanging information with the microprocessor at each automatic station. I will now describe some of the ways automation, robotics, and information flow are applied to the semiconductor industry. It is interesting to note that we are now dependent on microprocessors to automatically manufacture very large scale integrated circuits—and of course the microprocessor is made of very large scale integrated circuits, which is why the cost has come down while the com- puting power has gone up. I will not be able to describe many of the 200-300 processes there are in making a semiconductor. I will concentrate on the process steps that change a very thin slice of polished silicon into the semiconductor sites on that slice or wafer. The steps prior to the creation of the slice involve growing a large silicon crystal, then cutting it into thin slices and polishing them prior to beginning chemical processes. l09

ll0 MOS-VLSI FIGURE l Stages in the process of manufacturing a functioning semiconductor. SILICON WAFER DIFFUSED METALLIZED WAFER WAFER CMI» U'CROPHOTO CHIP BONDED COMPLETED CHIP TO CERAMIC DEVICE FIGURE 2 Magnified photograph of an MOS-VLSI chip. FIGURE 3 Plasma-etch operation using a human operator in processing wafers.

Ill Figure l illustrates in very simplified form the process from silicon slice or wafer to complete device. Illustrated here is a metal oxide silicon, very large scale integrated (MOS-VLSI) device. At the upper left is the polished wafer, then the wafer that has had many layers of selectively grown materials applied at the sites where the integrated circuit is to be formed. This process involves photo- lithography, etching away the site that is exposed and applying layers of various doped materials to form the functioning semiconductor. The series of process steps that selectively place layers of precisely controlled materials is repeated many times until a functional semiconductor is created. And finally, there are metallized layers applied that will allow electrical contact with the outside world. The wafer is then cut into individual integrated circuits, shown greatly magnified on the left, and finally that very small chip is mounted and put into a complete package for use in an electronic circuit. Figure 2 shows a single MOS-VLSI chip—a 64K RAM. We speak of semi- conductors, and originally a single transistor—the semiconductor analog of a vacuum tube—was what we built. Today we speak of integrated circuits that are single chips on which thousands of individual components are created and inter- connected. For example, even at this huge magnification the details of one of the l50,000 transistors on the chip cannot be seen. I would like to just take a few of the steps in the process that creates the individual sites on the wafer to illustrate automation in the semiconductor industry. Figure 3 provides an example of what is happening. This shows a plasma-etch operation in which individual wafers are placed inside the chamber, and then a microprocessor controls the processes automatically, including creating the vacuum and doing the plasma-etch operation. The wafer is being handled by an operator with tweezers. In Figure 4 that same operation has been automated. In the background a robot arm picks up the wafers from the cassette of 25 wafers and moves them into the diffusion chamber. After the operation is complete, it FIGURE 4 Fully automated plasma-etch operation.

ll2 FIGURE 5 Carrier for silicon wafers. moves them back out and into the holder. As a matter of fact, the pickup uses the Bernulli principle so that it does not touch the wafer at all. Figure 5 shows one of those carriers. It carries about 25 of the wafers through all the processes. There is now available automatic equipment to remove wafers from the carrier into a process and back out again, completely automatically. As I have mentioned, auto- mation applies to testing as well as process. Figure 6 shows a test setup in which the wafers are automatically unloaded, tested, and returned to a cassette. Figure 7 shows what might be considered a typical integrated circuit manufacturing facility. All work is done in an ultraclean environment, and many of the processes are automatic—but not interconnected. The next step in automation is to develop transport systems to connect automatic processes. Figure 8 shows such an operation in which all the photo- lithographic steps are interconnected. In the center is a full and empty cassette of wafers. The wafers are automatically removed from the cassette, moved through several photolithographic operations, returned automatically through a transport system to the empty cassette, and then moved to the next operation. I have used these examples to illustrate how automation can be accom- plished. Wafers can go through many operations in a similar fashion and can be tested at those stations, so that the test equipment can also be monitored by a shop processor looking over the whole operation. The cassettes can be moved in fact from one operation to the next automatically, as well as the wafers moved within each operation. Figure 9 illustrates how an entire shop can be automated. At the top is a shop flow computer that controls all the operations inside that shop. On the left side are individual terminals so that operators no longer have to use paper records but can access all information and processes through terminals. Each of the processes can be monitored by the shop flow computer; finally, test positions can also be monitored. That is the power that the microprocessor and automation can bring to such a shop. By tying all these systems together, not only can accurate control be achieved, but by monitoring the test equipment, any of the processes that begins to drift out of specification can be quickly and, in many cases, automatically brought back into specification. Operators and engineers

ll3 FIGURE 6 Silicon wafer automated testing operation. FIGURE 7 Typical integrated circuit manufacturing facility.

FIGURE 8 Transport system connecting photolithographic operations on silicon wafers. know at any time where any wafer is in the process and what is going on in thai process and can much more accurately control the total process. Many firms in the United States have accomplished automation with some of the processes. A few have gone further and have linked most of them together. My own firm is one of them. The application of these techniques is accelerating, so that I can say with some confidence that U.S. firms are neck-and-neck with the best in the world in automation for semiconductor manufacture. FIGURE 9 VLSI information systems controlling production operations.

DISCUSSION OF "INTEGRATION OF THE MANUFACTURING SYSTEM" Frank Daley Because I am now a graduate of General Motors and to a limited extent free- lancing, please be aware that my remarks are those of an individual manufac- turing engineer, and do not reflect in any way views other than my own. My comments are general, based on information about many companies from many sources. This is important because operating managers all over the United States are facing very difficult decisions about building bridges to the future. Reaching for the integrated manufacturing system Goldhar and Burnham have described will take a long, strong arm. Surely, many of the elements can be demonstrated practically today, and the ability to combine pieces and develop the pyramid to its full capability is as much in our hands here in the United States as anywhere in the world. The critical question is, how do we handle the timing? The timing of motiva- tion and the timing of response will tell if the answers arrive in time to be useful. Can the benefits of the integrated manufacturing system accrue by getting it in place in time to stop the outflow of manufacturing from the United States? A number of U.S. industrial companies have spent to their limits on retooling for new products or have come up against the wall because of costs or investment problems and have changed direction. The difficulty seems less intense in so- called high technology or new technology businesses in which the rapid and turbu- lent flow of new designs and the quantum jump of product improvements force continual investment and demand new processes just to stay in the market. Even in these fields, though, there is evidence that the turnover cycle is slowing and becoming more like some of our old standby producers in relying on a more conservative approach when possible. Some colleagues argue that we as a nation are facing some decisions as to whether faltering mature industries are worth an intensive effort to do more than maintain present markets or whether we should accept a graceful decline. These people say that lower outlays by U.S. consumers may be a benefit of letting certain commodities be supplied by countries that have an advantage—in labor costs, for example—and that our efforts and investment should be applied to vigorous growth industries in which innovative high technology can establish a wider lead over potential competitors. I am glad I do not have to make those choices. In areas in which we do want to be assured of leadership, we must think about reaching that goal in a manner that is faster than our traditional gradual expan- sion patterns have permitted. The incremental approach of creating islands of automation may build the confidence of managers to put down larger bets, but ll5

l16 staying alive in the meanwhile will probably require some moves that seem con- trary to what we really want. It is difficult for me to see clearly what methods will be provided for decision makers to evaluate the costs and risks involved in a broad commitment to huge novel systems. Tradition would seem to say, "Wait until someone else tries such a system first," because in some cases the decision involves betting the company. Among other thoughts, in the product-development field a prototype is often created at considerable expense to do the vital job of convincing decision makers. In this case we may need a prototype large system to convince investors to reach out farther than can be achieved by the slow coalescence of the islands of automa- tion. The people who are working on this part of the strategy seem hard to find. Maybe the prototype mission needs to be recognized at appropriate places and levels in the engineering and management disciplines in manufacturing. The objective would be to generate a plan by which a large-scale integrated manufac- turing system can be underwritten so risk can be spread acceptably in the event of trouble. Such a plan might include new concepts of reward systems that motivate working managers to give greater importance to long-term benefits, providing inducement to try significantly better ways of doing things, and breaking with the protective shield of traditional practices. Walt Disney Enterprises has created a prototype of the future of our com- munities that will probably attract thousands. Is it possible to get a few ideas from that multimillion-dollar enterprise and attract top decision makers to take the big step to make U.S. industry again highly competitive in all areas? One last note. In one of the examples of flexible machining systems given by Goldhar and Burnham, the reporter who was quoted comments that the system is capable of recycling off-specification parts a second time. A truly modern auto- matic system should produce nothing but good parts. Quality is a prominent capability of a properly integrated manufacturing system.

THE EXPERIENCE AT ROCKWELL INTERNATIONAL Arnold M. Kriegler According to George Schaffer's paper presented in session I, I am really the "director of organized chaos." I would like to share with you an example drawn from our manufacturing experience that touches on some of the things we have heard about today, with emphasis on the rethinking of the manufacturing process that Joel Goldhar mentioned. Various people mentioned group technology, and this example shows some group technology application. It also addresses the dilemma that was posed by James B. Quinn: the apparent conflict between near-term results and long- term strategies. And there are some other things woven in here, but let me proceed with this example of a minor victory in this area. Figure l shows a few of the thousands of different wave-guide mechanical assemblies that we produce for our microwave radio systems. We have already achieved the marketing ideal of making them different for every single customer. We are delivering about l5 to 20 customized major systems per day, with annual sales approaching a quarter of a billion dollars. These wave-guide assemblies are among those things that customize the end product. The good news, as far as group technology is concerned, is that they are basically made up of similar parts that look somewhat like plumbing. They pipe microwave frequencies between 2 and l8 gigahertz, doing the same thing that wire does at other frequencies. We had a fairly nonesoteric set of objectives that were driven by competi- tion. We needed to reduce the cost of these assemblies by about 50 percent. We needed to reduce the lead time in order to accommodate this "marketing ideal." Our company emphasizes return on assets rather than return on sales, so inventory reduction was an objective. We set a goal for ourselves to have this project pay back in less than three years. Also, we wanted to set the stage for more computer-integrated manufacturing. This is a set of objectives that even the most flinty-eyed controller would probably agree with. Our major strategy was to transform our batch metal-fabrication shop from its traditional organization of departments of like machines to the process-flow manufacturing setup that has been mentioned in previous papers. Our thought was that we could best accomplish that through group technology. We took the approach that we would try to make use of existing machines and processes to the greatest extent possible. Figure 2 shows a floor plan of the tra- ditionally organized batch shop in which like machines are grouped: The sheet metal brakes are all in one place, the spot welders are all in one place, the mills are all gathered together, the shears are all together. This traditional arrange- ll7

ll8 FIGURE l Wave-guide mechanical assemblies for microwave radio systems. ment gave rise to the random-arrival batch-flow situation that Joel Goldhar told us we had to change. Figure 2 also depicts the organized chaos George Schaffer discussed. It shows the actual flow of one wave-guide assembly through the shop. It is, unfortunately, a real example of the random-arrival batch-flow, characterized by long delays and long queues, that causes the 95 percent nonproductive time that one of the earlier speakers mentioned. Our strategy was to capture an appropriate mix of the machines involved in the manufacture of this family of wave-guide parts and bring them into a manu- facturing cell dedicated to the wave-guide family of parts (see Figure 3). In this small area, now, we will do about 25 percent of this shop's annual volume. Figure 4 shows the area after we brought the deburring and degreasing func- tions, the cut-off saws, the staging and stocking area, silver soldering, mechanical assembly, and the machining processes all together into a group-technology cell designed to build this family of parts. The area was our prototype cell, an example that would serve to reduce a supervisor's fear of change. After making this fundamental change, this rethinking of a very traditional manufacturing process, we have had the following results: • Reduced cost 30 percent (vs. 50 percent) • Reduced lead time 70 percent (vs. 50 percent) • Reduced inventory $500,000 • Maintained quality

ll9 FIGURE 2 Traditionally organized shop with random-arrival batch-flow intermixed with other production. • Payback in l year (vs. 3 years) • Created climate for progressive change to CIM • Second and third cells coming easier Interestingly, the bulk of the savings has been the indirect part of the cost. Direct labor savings are on the order of l0 percent, since we have just started to address the automation of some of the processes. But the indirect costs have been a very pleasant and major improvement. We have disposed of dispatching functions and material handling functions. Since the out basket of one operation is the in basket for the next operation, we do not need dispatchers and we do not need material handlers. We have even cut out internal inspection as things go from step to step and have convinced the people who make the parts that they are responsible for quality. There seems to have been no loss of quality; in fact, I can probably make a case for improved quality. We have beat our lead-time objective. We have cut the average throughput time for these parts from seven weeks to less than two weeks. That has resulted in an inventory reduction of $500,000, which is about two-thirds of the work-in- process associated with these parts. And our responsiveness in being able to provide these customized parts to final assembly is correspondingly improved. We have maintained quality, as I said. We achieved our pay-back on this project in less than a year. We had a three-year objective and surprised ourselves when it really worked out to be "payback-as-you-go." Since we received benefits from the indirect savings so quickly, we are confident that near-term financial

l20 FIGURE 3 Existing machines and processes were moved and reorganized into a manufacturing cell dedicated to the wave-guide family of parts. MILLS DRILLS SPECIAL MACHINES DEBURR/DEGREASE MECHANICAL ASSEMBLY FINISHING (EXTERNAL TO SILVER SOLDER STAGING. STOCK FIGURE 4 Group-technology cell with process-like flow of family of parts.

l2l objectives and long-range strategies are not necessarily mutually exclusive. One of the most important things we believe we have created is a climate for change that minimizes the problem William Beeby discussed—psychological failure. My veteran shop management folks now are less afraid of trying to do things in radically different way. As testimony to that, the second and third cells are coming much more easily. In the next two or three months we will complete our sheet metal cell, and we have a machining cell in design. These next two projects are coming along much more easily than this prototype cell did.

INTEGRATION OF THE MANUFACTURING SYSTEM: EXPERIENCES M. Eugene Merchant One of my major responsibilities is to observe and evaluate research, develop- ment, and implementation of advanced manufacturing technology throughout the world. In so doing, I find it quite evident, as reflected in the paper by Goldhar and Burnham, that by far the most powerful and revolutionary manufacturing technol- ogy being researched, developed, and implemented today is computer-integrated manufacturing (CIM). This technology has the capability to integrate all of the various elements of the total system of manufacturing—from the design of the product through the entire production process to the final shipment of finished products, fully assembled, inspected, and ready for use (see Figure l). Furthermore, it has the capability not only to integrate all of these elements into a total system but also to optimize and to automate both the operations within these elements and the total system—and to do that on-line and flexibly. Although this technology is still, generally speaking, in its infancy, it has already demonstrated far greater potential for increasing manufacturing pro- ductivity and quality and for reducing manufacturing costs (i.e., creating real, tangible wealth most cost-effectively) than any other technology that has appeared on the scene since the onset of the Industrial Revolution. As such it is generally being recognized worldwide as beginning to create a second Industrial Revolution. An indication of this potential can be gleaned from performance experience already obtained with computer-integrated systems of machine tools and related production equipment. These systems, commonly known as flexible manufacturing systems (FMS), are to some extent microcosms of a portion of the future total system of computer-integrated manufacturing. To illustrate the potential power and cost-effectiveness of this technology, I will discuss two examples. The first is the system that is installed at Messerschmidt-Bolkow-Blohm in Augsburg, West Germany, producing titanium parts for the Tornado fighter plane. Figure 2 shows the components of this system. There are some 28 numerically controlled (NC) machine tools, such as those seen in the center of the figure, operating under coordinated computer control within the system. Supporting these are two other main subsystems. The first is an automated workpiece transfer system bringing workpieces to and from the machine tools by means of computer- controlled carts, such as those shown in the lower right-hand corner of the figure. The second of these is a fully automated tool transport and tool-changing system. This brings tools to each machine via an overhead transport system, seen in the upper part of the figure. It then automatically transfers these tools to a continu- ous elevator tool storage, seen at the left of the figure, which in turn interfaces l22

l23 PERFORMANCE r" i r ~~i r~ _ , _*._^ PRODUCTION PRODUCTION PRODUCT PRODUCTION PRODUCTION DESIGN PLANNING CONTROL EQUIPMENT PROCESSES 1 (FOR fc 'PRODUCTION)™ (PROGRAM- ^ (FEEDBACK, ^ (INCLUDING _^_ j (REMOVAL, MING) SUPERVISORY, MACHINE FORMING, I ADAPTIVE TOOLS) CONSOLI- {_ OPTIMIZING) , DATIVE) COST AND CAPABILITIES -* t ' t FINISHED PRODUCTS (FULLY ASSEMBLED, INSPECTED AND, READY FOR USE) I NEEDS 1 (PRODUCT REQUIREMENTS) .CREATIVITY 1 (PRODUCT CONCEPTS) FIGURE l Computer-integrated manufacturing (CIM) elements. with the automatic tool-changing mechanism of the machine tool. All three subsystems—the machine tools, the work transfer system, and the tool transfer system—are coordinated, controlled, and automated by a hierarchical distributed computer system. The results obtained with this technology are as follows: The machines in the system are cutting metal 75-80 percent of the time, instead of the usual l5-30 percent obtained with machines that are not part of such a system. The lead time for the Tornado is l8 months compared to 30 months for an equivalent plane pro- duced conventionally. The system, when compared with identical NC machine tools producing the same parts that are not part of such a system, has reduced the required number of skilled machinists by W percent, the required floor space by 39 percent, the part-flow time in the factory by 25 percent, and the required capital investment by 9 percent. In addition, nonquantified benefits are experienced with this system. Quality has been increased, manifesting itself in the form of higher reproducibility, lower rework costs, and lower scrap rates. This in turn has resulted in lower quality assurance costs. Also, adherence to production schedules is much improved, and the usual flood of paper has been considerably decreased. Furthermore, working conditions are improved owing to the decreased risk of accidents and the relief from heavy physical labor and monotonous work. The second example is that of an essentially unmanned FMS installed at Niigata Engineering Company's Internal Combustion Engine Plant in Niigata, Japan. Its cost was about $2.5 million. It is machining 30 different types of diesel engine cylinder heads in lot sizes ranging from 6 to 30 parts. A robot mounts the simpler parts on pallets automatically. The system runs 2l hours per day produc- ing parts; it runs completely unattended at night. The savings with this system are as follows: Only 6 machines are required to produce the parts, compared to the 3l (including 6 NC) required conventionally (an 8l percent reduction); the number of operators has been reduced from 3l to k

l2* Automatic tool transport system Automatic tool transfer • • il .*. , i Switching 1 ••-. '•T cabinets CNC-control/DNC operation Automatic pallet changer Automatic tool changer Continuous elevator tool storage Automatic Z-length control (adjustment) Automated material transport system FIGURE 2 Five-axis multiple-spindle CNC milling machine in bridge design with automated peripheral equipment installed at Messerschmidt-Bolkow-Blohm in Augsburg, West Germany. (an 87 percent reduction); and the lead time for these parts has been reduced from l6 days to *. Both of these examples are drawn from countries other than the United States, and that fact pinpoints a problem. Although the major portion of the technology implemented there originated in the United States, American manu- facturing industry, sadly, has not moved as rapidly as industry in some other countries to implement the results of that native basic knowledge and innovative manufacturing technology. This situation does not exist because the technology is not available from American suppliers, but rather because, in large part, American industry has lost its understanding of the importance of manufacturing to its competitiveness and survival. That fact, and the factors responsible for it, have been aptly described by James Quinn in his keynote address. There are those who say that there is no future in manufacturing for Ameri- can industry—that, instead, the future is in high technology. Most regretably, such thinking is completely blind to the fact that today manufacturing is high technology. If you are associated with manufacturing and high technology is not a fact, or on the way to becoming so, in your company, then indeed, for your company, there is likely to be no future.

SESSION 3 SUMMARY AND CALL TO ACTION

Session 3 participants. Left to right (standing) Jordan 3. Baruch, George S. Ansell, H. Guyford Stever, Peter Scott, (seated) Allen Newell, Session Chairman Erich Bloch, and John K. Castle.