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Applying Kaizen and automation to process reengineering
Journal qf Manu[acturing Systems Vol. 15/No. 2 1996
Case Study
Applying Kaizen and Automation to Process Reengineering JrJungLyu,
National Cheng Kung University, Tainan, Taiwan
Abstract
ment. Using automation, on the other hand, is to adopt advanced manufacturing technology so that productivity can be raised dramatically. Many companies have implemented flexible manufacturing cells (FMCs), flexible manufacturing systems (FMSs), or computer-integrated manufacturing (CIM) to link enabling technology with their manufacturing processes. Many studies state that automation is the start of another wave of the Industrial Revolution. The purpose of this paper is to illustrate how the approaches mentioned above can be merged. An industry project serves as a practical framework to integrate both concepts. Specifically, this research looks at how the kaizen approach and the automation approach can be unified into process reengineering. Using process reengineering means to radically rethink a manufacturing process that has existed for many years to reduce costs and improve efficiency and effectiveness? An animated simulation model is also developed to study the performance improvement of the case company. The final section of the paper discusses further development of this project.
Kaizen and automation are two different approaches to improve the performance of manufacturers. Both approaches have been widely discussed and reported in related literature. This paper proposes a framework to integrate kaizen and automation to reengineer a manufacturing process. A case project shows the procedure of process reengineering. This study concludes that using an animated simulation model is an important step during process redesign. This research also shows that a nearly 50% improvement in labor productivity at the case company is possible with the streamlined manufacturing process.
Keywords:Automation, Simulation,Quafityand Productivity
Improvement
Introduction Improving quality and productivity to gain a competitive advantage has always been a major issue for most manufacturing industry leaders. Furthermore, as stated by Giffi et al., "sustained competitiveness cannot be created overnight and will never be reached if manufacturers focus on only some of the elements in the manufacturing equations.'" A manufacturer, therefore, should always try to use advanced manufacturing technology to adopt better management skills, to "right size" the corporate organization structure, and to consider any other appropriate approaches to gain a superior return over the long run. Kaizen and automation--two quite different approaches to improve quality and productivity of manufacturers--have been widely discussed recently?,3 Both approaches have been applied to numerous industries, and many successful experiences have been reported. Kaizen, meaning (continuous) improvement, is as a key factor in the economic success of Japanese industries. With "traditional" techniques such as quality circles (or small-group activity) and management circles (plan-do-check-act), kaizen may turn a profitless company into a profitable one without an enormous investment in equip-
Company Background The manufacturer studied in this paper is the pipe shop of China Shipbuilding Corp. (CSBC). The pipe shop was established about 20 years ago and currently does not meet the shipyard's minimum production requirements. The shop's competitors, on the other hand, can provide a higher pipe production rate at a much lower cost. When CSBC is transformed from a nationally owned company into a privately owned, profit-oriented company in the near future, the pipe shop may face the difficulty of survival. Another factor is that, because the shipbuilding industry is a so-called 3K (kiken, kitanaei, and kitsui--meaning dirty, dangerous, and hard work, respectively) industry, 5 the pipe shop is also facing the problem of recruiting qualified workers.
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and obsolete machines. The pipe shop layout is shown in Figure 2. From the executive manager's point of view, the situation is clear: Is it possible to increase the production rate of the pipe shop with a smaller workforce? Two types of approaches--kaizen and automation--were proposed by consultants from Japanese shipyards and Western countries' shipyards, respectively. The concepts and practices of these two approaches are briefly explained in the following sections.
The pipe shop can produce pipes in all size ranges in both ferrous and. nonferrous materials for the shipyard; however, its production rate of 150 pipes per day cannot meet the requirements of the shipyard, and overtime or subcontracting is necessary, resulting in increases in cost. A flowchart, shown in Figure 1, demonstrates the manufacturing process of the pipe shop. Williams and Oglesby6 present a more detailed description of the piping design, fabrication, and installation in commercial shipbuilding practices. There are 67 workers currently in the pipe shop, and the production rate per worker per day is much lower at competitive companies. Among the reasons for the low labor productivity, based on the observations of the managers, are inadequate plant layout
Automation Approach Automation is one of the most competitive tools available to manufacturers. A company may take advantage of the new technologies so that its manufacturing process and operations can outperform those of other companies. The contents of automation technologies involve not only computer-aided design (CAD), computer-aided manufacturing (CAM), robotics, computer numerical control (CNC), and many hardware/software products, but also include concepts and techniques such as design for manufacturing (DFM), value engineering (VE), and group technology (GT). To design and implement new technologies and to build "the factory of the future" is, therefore, not simply the purchasing and installation of some turnkey solutions for the industry. Careful financial justification of the investment and adequate education and training are also required. Latorre and Zeidner 7 review the process of designing and implementing automation technology. Consultants from American and European shipyards gave advice regarding the automation of the pipe shop. Some suggestions are as follows:
Incomingrawpipes I
Cutting t
I Bending
I
I WeLding
• Grinding
•
I
Cleaning/coating [ Figure 1
Traditional Manufacturing Process of Pipes
126
There are three overhead cranes in the pipe shop, and one of them is always broken down. Because the utilization rate of cranes is very high, the pipe shop apparently should purchase one more crane. Another bottleneck of the pipe shop is the bending process. Because of the time needed to change the fixtures--up to 1.5 hours for a large bender machine--the suggestion is to improve the pipe marking method during the cutting process. That is, once the raw pipes are cut, a computer-aided marking machine is used to mark the pipes required to be bent in the process. Workers can then classify cut pipes to
Journal q/ Mamf/acturing System~' gol. 15/No. 2 1996
Cleaning and coating zone
Inspected pipes
Electric transfer car rail
Welding zone
Cutting zone
Grinding zone
Bending zone
Raw pipes storage area Inspection area
Overhead cranes
Welding zone
Joining zone
Figure 2 Original Layout of Pipe Shop
reduce the number of fixture changes during the bending process. The capacity of the welding zone is inadequate, and many pipes are waiting to be welded on the shop floor. Automated welding machines should be purchased in the near future.
Consultants from Japan strongly discouraged the managers of CSBC from adopting the automation approach. They felt that the productivity of the pipe shop could be further improved using kaizen. Some examples proposed by the Japanese consultants are as follows:
Kaizen Approach
•
When the kaizen approach is applied to manufacturing, it becomes CIM (continuous improvement manufacturing)? CIM utilizes seven tools--Pareto charting, histograms, fishbone techniques, control charting, scatter diagrams, graphs and flowcharts, and check sheets--to execute problem-solving activities in the factory. The basic mechanism of the kaizen approach makes any possible improvements under the PDCA (plan-do-check-act) cycle, standardizes the improvements, and continues for another PDCA cycle. With quality improvement activities, managers and workers are encouraged to use innovation and risk-taking as an opportunity to better meet customers' requirements. Kaizen has been proven useful in various areas, including new product development and safety improvement. A complete discussion regarding kaizen can be found in Imai. 8
°
•
127
Fixtures on many welding machines can be improved by the workers themselves through quality control circle activities, thereby increasing the efficiency of the welding zone. It is well known that outfitting is a very laborintensive task. Consultants suggested that pipes be classified, based on the so-called outfitting zone of the shop, into different working units after the pipes are cleaned and coated. These pre-outfitting efforts will barely increase pipe handling time but will greatly reduce the outfitting time. After some cross-department meetings between the pipe shop and the design division of the shipyard, consultants suggested that the change in the manufacturing process from "welding pipes after pipes bent" into "bending pipes after pipes welded" is possible and can increase the efficiency of the pipe shop.
Journal of Manufacturing Systems Vol. 15/No. 2 1996
Unified Framework Advice from different approaches sometimes causes confusion for managers regarding the priority of the actions and the subsequent performance measurement. A unified framework depicted in Figure 3 demonstrates how the kaizen approach and the automation approach are merged for process reengineering to achieve dramatic performance improvement. The framework includes eight stages and a PDCA cycle for continuous improvement efforts. The sequence of activities involved in process reengineering is as follows:
Envision future of company
I Organizeteam and set goal
L [
I
1
PLAN
Examine existing process
Identify process reengineering opportun t es and current capab ty
•
•
•
Envision the future o f the company. The manag-
I
er must use creative thinking to suggest a new process that can effectively improve the manufacturing environment. In the case study, a top manager applies group technology to rearrange the pipe shop and proposes an "optimum" pipe shop layout without constraint. Under this proposed layout of the pipe shop, the length in each production line is much shorter, and the flow time of the materials is reduced. This draft layout has inspired an interest to redesign the manufacturing process. Organize a team and set a goal. A process is a collection of activities or tasks that takes input, adds value to it, and provides output to accomplish an objective. Most of the process reengineering projects require a multifunctional team with members from different departments due to the cross-departmental nature of the processes. In the case study discussed, a team consists of design division managers and pipe shop managers. The goal of the team is to study the possibility of a 25% increase in production rate and a decrease of five workers in the pipe shop. This project team will review the suggestions from different approaches and decide how to implement an improvement program to achieve the goal. Examine the existing process. It is a common practice to start the redesign of a system by documenting the existing system. This serves as a benchmark for the future system and an important basis for any improvement projects. It took about two months for the project team to review the existing manufacturing processes. The documents established are included in the final project report and will not be discussed here.
J
Design new process DO
Implement new process and modify infrastructure
I Measureperformance
CHECK
ACT
Standardize new process
Figure 3 Framework for Process
Reengineering
Nonetheless, using a flowchart to map the process flow was very useful in analyzing the manufacturing processes. Identify process reengineering opportunities and current capability. To identify possible process
reengineering opportunities, managers must have more insights into the processes either from the enabling technologies or from new management techniques. As discussed in the previous sections, studying two approaches for the case company resulted in some suggestions and identified many possible modifications. Some of them are simply small revisions in the existing plant, but
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Journal qf Manufacturmg Systems Vol. 15/No. 2 1996
•
•
•
one of the concepts from the kaizen team resulted in a dramatic redesign of the manufacturing process. This concept provides an opportunity for performance breakthrough, which project team decides to work on. Design the newprocess. With input from previous stages, the project team can design a new process. Persons involved in process reengineering should constantly question which processes or tasks could be shut down, reengineered, or improved. In the case study, the project team adopted the idea of "bending pipes after pipes welded" instead of the existing "welding pipes after pipes bent" concept in redesigning the manufacturing processes of the pipe shop. The team members have discussed the new design from different aspects--management (impact of human resource), equipment (feasibility of hardware and software), and facilities (accompanied layout of the new manufacturing process) to refine the new manufacturing process. For example, managers from the design division had calculated the percentage of pipes that could fit well in the new design process, based on drawings of some existing ships, and convinced every team member that the new concept was feasible.
Standardize the new process. Before beginning a
new process reengineering project, it is necessary to standardize the new process if the organization tries to keep the performance as good as expected. Availability of qualified human resources, adequate equipment, and related documents are all important elements in standardizing the new process. In general, educating and training personnel in the new process environment is critical to maintain the same, if not better, performance. There are many books and papers that discuss process reengineering. For example, Hammer and Champy ~° and Roberts" are good sources to use to gain a better understanding of how to undertake a radical reinvention of the process. Because the new process is so dramatically different from the original process, it is common practice that top managers may feel that it is too risky to perform such a "revolutionary" change. During the interim of the case project, top managers hesitated regarding implementation of the new process, and project team members had difficulties agreeing on the possible performance improvement. With the use of an animated simulation model, the new layout could be justified. The next section discusses the simulation model development.
Implement the n e w p r o c e s s and modify the infrastructure. This stage is regarding the implemen-
tation of the new process. Note that the reengineered process should be fine-tuned as problems surface before and after installation. There is always a tradeoff in the implementation stage with cost, technology, and other issues. That is why the framework proposed has an iterative nature. During the case study period, the project team found that the animated simulation model, which will be discussed in the following section, is an important tool for effective communication among the team members and for the prediction of possible bottlenecks and expected performance of the new process. Measure the performance. Finally, one must determine the level of success of the reengineering project in terms of the goal set in the previous stage. As shown in many reports, an improvement of 50-60% in cost and productivity is a realistic objective. 9 A detailed discussion regarding the performance of the new process is shown in the following section.
Simulation Model Simulation is well recognized as a very useful technique for the design and evaluation of complex manufacturing facilities. !~ As computer hardware technology keeps advancing and more animated simulation software becomes commercially available, several studies have been conducted regarding the visual interactive simulation of a manufacturing system during the past decade.~3,14These studies, in general, have shown that the inclusion of animation as a simulation tool can enhance the presentation to users and improve the communication between managers and system programmers. With the addition of interactive control ability, users can halt the simulation experiment at any moment to view the statistics and/or change some parameters; insights into the system's behavior are then understood. The procedure to develop a visual interactive simulation model, accompanied with the practices in the case project, is shown as follows:
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Journal of Manufacturing Systems Vol. 15/No. 2 1996
•
•
•
was also a necessary input of the software to show how the parts move during the manufacturing process in the plant. Figure 4 shows a revised plant layout input in the computer. Verification and validation. The computer simulation model needs to be verified if it is to work as intended and reflect the operation of the real system. An animated simulation model is much easier to verify and validate because users can monitor the results of each activity on the screen. The output generated from the simulation model, based on the existing process, provides a benchmark to compare its "reality." Results and analysis. Output, such as the average production rate or the utilization of each workcenter, can easily be found and collected by simulation packages. Users can also experiment with alternative layouts to improve the performance of the system. The project team used simulation as a communication channel to examine the possible results of using different operating parameters in the job shop.
Define the goal. A good simulation model is one that covers only the system of interest and can provide answers for managers. An accurate definition of the goal is always required. The major concern of this project was the estimated production rate and the necessary number of workers on the shop floor for both the existing and new manufacturing process environment. The time to complete the simulation experiments also had to be as short as possible. Collect and input data. Sufficient and correct data must be available to formulate a simulation model and to execute the computer experiments thereafter. Information such as demands, routing files of the parts, processing time of the parts, moving time from location to location, and so on is usually required. Traditional time and motion studies and statistical analysis were conducted in this project to find the necessary information. Performance data from the new facilities was collected from vendors. Draw layout andpartflow diagram. For an animated simulation model, it is necessary to draw the layout for the background during the execution of the simulation model. During the project, the size of the pipe shop and the position of each machine were measured. Layouts for the new process and for the existing process of manufacturing pipes were drawn. A part flow diagram
In this study, Promodel PC version 5.0 is selected as the simulation software package) 5 This package provides an easy input/output interface, dynamic graphics presentation ability, and various analysis tools at an affordable price. The simulation models were built and executed on an IBM-compatible 486
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Journal qf Manu[hcturing Systems Vol. 15/No. 2 1996
PC. Development of a simulation model for the project, including debug, took less than two weeks; however, it took more than three months to collect and verify the necessary input data.
of this finding is that there is no need to purchase a new overhead crane, although this had been suggested during the automation evaluation. An interesting observation is that the managers feel that the workers will have more pride and responsibility in the proposed new manufacturing process. That is, after related activities are designed and integrated into each workcenter in the new layout, the job of each worker is enriched. Workers are now involved in a larger portion of the manufacturing process and should be more motivated to improve their own working environment. Therefore, quality and productivity could be improved due to the human factor. Because the pipe shop is a division of CSBC, a nationally owned company, all the investments proposed were presented to the government for approval, which was granted. Currently, the pipe shop has started the purchasing process.
Results and Analysis Two types of analyses, static and dynamic, were conducted. Static analysis is well documented in many plant layout textbooks. One can calculate the moving distance of a pipe during the production process. The procedure is simply to put the layout on the table and go through the manufacturing process flowchart and part flow diagram to determine how a pipe is manufactured in the factory and how much moving distance is required. For example, it was found that the moving distance of a large straight pipe could be reduced from 228.5 meters in the existing layout to 136 meters in the new layout. Various similar calculations were done, and they all illustrated that the new layout was promising. Compared to the static analysis, simulation then is considered dynamic analysis. Most simulation models approach the manufacturing system dynamically so that arrival rates of demand and equipment utilization, for example, are all input as dynamic variables. Users examine the state of the simulation model evolving over simulated time, such as watching a conveyor system in a factory. Assuming the pipe shop operates 8 hours a day and 260 days a year, the output of the experiments on the simulation model depicts that the average production rate can be increased from 150 pipes daily to 195 pipes daily after the process is redesigned. The number of workers required in the proposed layout can be reduced from 67 to 60 workers. The labor productivity can therefore increase from 2.24 (150/67) to 3.25 (195/60)--a nearly 50% improvement in productivity. This dramatic improvement is due in part to the streamlined manufacturing process (kaizen approach) and to the use of some new facilities (automation approach). With the managers' knowledge that 10 persons are planning to retire in the next two years, the proposed layout can also reduce the pressure of recruiting workers. Another important simulation output shows that use of the overhead cranes can be reduced from 96 to 70 times daily in the new manufacturing process environment. This result is consistent with the top manager's ideal plant layout vision. The implication
Conclusions and Future Research Although the automation approach and the kaizen approach are quite different, this research shows that it is possible to combine both approaches for process reengineering. Based on the empirical results from the pipe shop in the case study, the improvement is dramatic. The following points summarize the information resulting from this project: 1. Think about the process instead of products and departments. 2. The proposed framework is effective and seems to be general enough to be applied to other types of process redesign. 3. A cross-department team is required, and good communication among team members is necessary. 4. Simulation is very important in process reengineering. 5. In redesigning a manufacturing process, human factors should be carefully considered. 6. Improvement performance in process reengineering can be very dramatic. As discussed above, use of a simulation technique is important in process reengineering. Although most simulation packages have a much better interface compared to that used in the past decade, managers and engineers in the case pipe shop felt that
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Journal of Manufacturing Systems Vol. 15/No. 2 1996
7. R. Latorre and L. Zeidner, "Computer-lntegrated Manufacturing: A Perspective," Journal of Ship Production (vl0, n2, 1994), pp99-109. 8. M. Imai, Kaizen: The Key to Japan's Competitive Success (New York: Random House, 1986). 9. G. Hall, J. Rosenthal, and J. Wade, "How to Make Reengineering Really Work," Harvard Business Review (Nov./Dec. 1993), pp I 19-131. 10. M. Hammer and J. Champy, Reengineering the Corporation (New York: Harper Business, 1993). 11. L. Roberts, Process Reengineering (American Society for Quality Control, 1994). 12. ET.S. Chan and A.M. Smith, "Simulation Approach to Assembly Line Modification: A Case Study," Journal of Manufacturing Systems (vl2, n3, 1994), pp239-245. 13. P.C.Bell and R.M. O'Keefe, "Visual Interactive Simulation--History, Recent Development and Major Issues," Simulation (v49, n3, 1987), ppl09-116. 14. M.E, Johnson and J.R Poorte, "A Hierarchical Approach to Computer Animation in Simulation Modeling," Simulation (v50, nl, 1988), pp30-36. 15. C. Harrell, ProModeIPC User Manual, Version 5.0 (PROMODEL, 1991). 16. J. Haddock, N. Seshadri, and V.R. Srivatsan, "A Decision Support System for Simulation Modeling," Journal of Manufacturing Systems (vl0, n6, 1992), pp484-491.
the design and implementation of a simulation model was too difficult for them. A decision support system for simulation modeling 16 seems to be a reasonable solution to this dilemma.
Acknowledgment The author thanks Mr. Ming-Hwa Phae for his programming efforts and Mr. Nan-Sun Lin for his helpful comments during the research period. The author is also grateful to Southern Illinois University at Carbondale for providing facilities during his sabbatical visit.
References !. C. Giffi, A.V Roth, and G.M. Seal, Competing in World-Class Manufacturing: America's 21st Century Challenge (Homewood, IL: Irwin, 1990). 2. G. Arndt, "Continuous Improvement in Manufacturing Based on 'Japanese Quality Techniques'," Robotics & Computer-Integrated Manufacturing (v9, n4/5, 1992), pp413-420. 3. K. Hitomi, "Manufacturing Technology in Japan," Journal of Manufacturing Systems (v12, n3, 1994), pp209-215, 4. V. Grover, K.D. Fiedler, and J.T.C. Teng, "Exploring the Success of Information Technology Enabled Business Process Reengineering," IEEE Transactions on Engineering Management (v41, n3, 1994), pp276-284. 5. "Japanese Shipbuilders Invest in Automation," Motor Ship (1990), pp14-16. 6. L.E. Williams Jr. and R.S. Oglesby, "A Survey of Shipboard Piping Design and Fabrication," Marine Technology (v20, n2, 1983), pp 107-149.
Author's Biography JrJung Lyu is an associate professor in the Department of Industrial Management Science at National Cheng Kung University (Tainan, Taiwan). He received his bachelor's degree in engineering science and master's degree in industrial management from National Cheng Kung University and his PhD in industrial and management engineering from the University of Iowa. He has participated in many projects supported by the National Science Council (Taiwan), China Shipbuilding Co., Taiwan Power Co., and private companies. He has also published several papers in international journals and written a book entitled Management Information Systems.
132
Case Study
Applying Kaizen and Automation to Process Reengineering JrJungLyu,
National Cheng Kung University, Tainan, Taiwan
Abstract
ment. Using automation, on the other hand, is to adopt advanced manufacturing technology so that productivity can be raised dramatically. Many companies have implemented flexible manufacturing cells (FMCs), flexible manufacturing systems (FMSs), or computer-integrated manufacturing (CIM) to link enabling technology with their manufacturing processes. Many studies state that automation is the start of another wave of the Industrial Revolution. The purpose of this paper is to illustrate how the approaches mentioned above can be merged. An industry project serves as a practical framework to integrate both concepts. Specifically, this research looks at how the kaizen approach and the automation approach can be unified into process reengineering. Using process reengineering means to radically rethink a manufacturing process that has existed for many years to reduce costs and improve efficiency and effectiveness? An animated simulation model is also developed to study the performance improvement of the case company. The final section of the paper discusses further development of this project.
Kaizen and automation are two different approaches to improve the performance of manufacturers. Both approaches have been widely discussed and reported in related literature. This paper proposes a framework to integrate kaizen and automation to reengineer a manufacturing process. A case project shows the procedure of process reengineering. This study concludes that using an animated simulation model is an important step during process redesign. This research also shows that a nearly 50% improvement in labor productivity at the case company is possible with the streamlined manufacturing process.
Keywords:Automation, Simulation,Quafityand Productivity
Improvement
Introduction Improving quality and productivity to gain a competitive advantage has always been a major issue for most manufacturing industry leaders. Furthermore, as stated by Giffi et al., "sustained competitiveness cannot be created overnight and will never be reached if manufacturers focus on only some of the elements in the manufacturing equations.'" A manufacturer, therefore, should always try to use advanced manufacturing technology to adopt better management skills, to "right size" the corporate organization structure, and to consider any other appropriate approaches to gain a superior return over the long run. Kaizen and automation--two quite different approaches to improve quality and productivity of manufacturers--have been widely discussed recently?,3 Both approaches have been applied to numerous industries, and many successful experiences have been reported. Kaizen, meaning (continuous) improvement, is as a key factor in the economic success of Japanese industries. With "traditional" techniques such as quality circles (or small-group activity) and management circles (plan-do-check-act), kaizen may turn a profitless company into a profitable one without an enormous investment in equip-
Company Background The manufacturer studied in this paper is the pipe shop of China Shipbuilding Corp. (CSBC). The pipe shop was established about 20 years ago and currently does not meet the shipyard's minimum production requirements. The shop's competitors, on the other hand, can provide a higher pipe production rate at a much lower cost. When CSBC is transformed from a nationally owned company into a privately owned, profit-oriented company in the near future, the pipe shop may face the difficulty of survival. Another factor is that, because the shipbuilding industry is a so-called 3K (kiken, kitanaei, and kitsui--meaning dirty, dangerous, and hard work, respectively) industry, 5 the pipe shop is also facing the problem of recruiting qualified workers.
125
Journal of Manufacturing Systems
Vol.15/No.2 1996
and obsolete machines. The pipe shop layout is shown in Figure 2. From the executive manager's point of view, the situation is clear: Is it possible to increase the production rate of the pipe shop with a smaller workforce? Two types of approaches--kaizen and automation--were proposed by consultants from Japanese shipyards and Western countries' shipyards, respectively. The concepts and practices of these two approaches are briefly explained in the following sections.
The pipe shop can produce pipes in all size ranges in both ferrous and. nonferrous materials for the shipyard; however, its production rate of 150 pipes per day cannot meet the requirements of the shipyard, and overtime or subcontracting is necessary, resulting in increases in cost. A flowchart, shown in Figure 1, demonstrates the manufacturing process of the pipe shop. Williams and Oglesby6 present a more detailed description of the piping design, fabrication, and installation in commercial shipbuilding practices. There are 67 workers currently in the pipe shop, and the production rate per worker per day is much lower at competitive companies. Among the reasons for the low labor productivity, based on the observations of the managers, are inadequate plant layout
Automation Approach Automation is one of the most competitive tools available to manufacturers. A company may take advantage of the new technologies so that its manufacturing process and operations can outperform those of other companies. The contents of automation technologies involve not only computer-aided design (CAD), computer-aided manufacturing (CAM), robotics, computer numerical control (CNC), and many hardware/software products, but also include concepts and techniques such as design for manufacturing (DFM), value engineering (VE), and group technology (GT). To design and implement new technologies and to build "the factory of the future" is, therefore, not simply the purchasing and installation of some turnkey solutions for the industry. Careful financial justification of the investment and adequate education and training are also required. Latorre and Zeidner 7 review the process of designing and implementing automation technology. Consultants from American and European shipyards gave advice regarding the automation of the pipe shop. Some suggestions are as follows:
Incomingrawpipes I
Cutting t
I Bending
I
I WeLding
• Grinding
•
I
Cleaning/coating [ Figure 1
Traditional Manufacturing Process of Pipes
126
There are three overhead cranes in the pipe shop, and one of them is always broken down. Because the utilization rate of cranes is very high, the pipe shop apparently should purchase one more crane. Another bottleneck of the pipe shop is the bending process. Because of the time needed to change the fixtures--up to 1.5 hours for a large bender machine--the suggestion is to improve the pipe marking method during the cutting process. That is, once the raw pipes are cut, a computer-aided marking machine is used to mark the pipes required to be bent in the process. Workers can then classify cut pipes to
Journal q/ Mamf/acturing System~' gol. 15/No. 2 1996
Cleaning and coating zone
Inspected pipes
Electric transfer car rail
Welding zone
Cutting zone
Grinding zone
Bending zone
Raw pipes storage area Inspection area
Overhead cranes
Welding zone
Joining zone
Figure 2 Original Layout of Pipe Shop
reduce the number of fixture changes during the bending process. The capacity of the welding zone is inadequate, and many pipes are waiting to be welded on the shop floor. Automated welding machines should be purchased in the near future.
Consultants from Japan strongly discouraged the managers of CSBC from adopting the automation approach. They felt that the productivity of the pipe shop could be further improved using kaizen. Some examples proposed by the Japanese consultants are as follows:
Kaizen Approach
•
When the kaizen approach is applied to manufacturing, it becomes CIM (continuous improvement manufacturing)? CIM utilizes seven tools--Pareto charting, histograms, fishbone techniques, control charting, scatter diagrams, graphs and flowcharts, and check sheets--to execute problem-solving activities in the factory. The basic mechanism of the kaizen approach makes any possible improvements under the PDCA (plan-do-check-act) cycle, standardizes the improvements, and continues for another PDCA cycle. With quality improvement activities, managers and workers are encouraged to use innovation and risk-taking as an opportunity to better meet customers' requirements. Kaizen has been proven useful in various areas, including new product development and safety improvement. A complete discussion regarding kaizen can be found in Imai. 8
°
•
127
Fixtures on many welding machines can be improved by the workers themselves through quality control circle activities, thereby increasing the efficiency of the welding zone. It is well known that outfitting is a very laborintensive task. Consultants suggested that pipes be classified, based on the so-called outfitting zone of the shop, into different working units after the pipes are cleaned and coated. These pre-outfitting efforts will barely increase pipe handling time but will greatly reduce the outfitting time. After some cross-department meetings between the pipe shop and the design division of the shipyard, consultants suggested that the change in the manufacturing process from "welding pipes after pipes bent" into "bending pipes after pipes welded" is possible and can increase the efficiency of the pipe shop.
Journal of Manufacturing Systems Vol. 15/No. 2 1996
Unified Framework Advice from different approaches sometimes causes confusion for managers regarding the priority of the actions and the subsequent performance measurement. A unified framework depicted in Figure 3 demonstrates how the kaizen approach and the automation approach are merged for process reengineering to achieve dramatic performance improvement. The framework includes eight stages and a PDCA cycle for continuous improvement efforts. The sequence of activities involved in process reengineering is as follows:
Envision future of company
I Organizeteam and set goal
L [
I
1
PLAN
Examine existing process
Identify process reengineering opportun t es and current capab ty
•
•
•
Envision the future o f the company. The manag-
I
er must use creative thinking to suggest a new process that can effectively improve the manufacturing environment. In the case study, a top manager applies group technology to rearrange the pipe shop and proposes an "optimum" pipe shop layout without constraint. Under this proposed layout of the pipe shop, the length in each production line is much shorter, and the flow time of the materials is reduced. This draft layout has inspired an interest to redesign the manufacturing process. Organize a team and set a goal. A process is a collection of activities or tasks that takes input, adds value to it, and provides output to accomplish an objective. Most of the process reengineering projects require a multifunctional team with members from different departments due to the cross-departmental nature of the processes. In the case study discussed, a team consists of design division managers and pipe shop managers. The goal of the team is to study the possibility of a 25% increase in production rate and a decrease of five workers in the pipe shop. This project team will review the suggestions from different approaches and decide how to implement an improvement program to achieve the goal. Examine the existing process. It is a common practice to start the redesign of a system by documenting the existing system. This serves as a benchmark for the future system and an important basis for any improvement projects. It took about two months for the project team to review the existing manufacturing processes. The documents established are included in the final project report and will not be discussed here.
J
Design new process DO
Implement new process and modify infrastructure
I Measureperformance
CHECK
ACT
Standardize new process
Figure 3 Framework for Process
Reengineering
Nonetheless, using a flowchart to map the process flow was very useful in analyzing the manufacturing processes. Identify process reengineering opportunities and current capability. To identify possible process
reengineering opportunities, managers must have more insights into the processes either from the enabling technologies or from new management techniques. As discussed in the previous sections, studying two approaches for the case company resulted in some suggestions and identified many possible modifications. Some of them are simply small revisions in the existing plant, but
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one of the concepts from the kaizen team resulted in a dramatic redesign of the manufacturing process. This concept provides an opportunity for performance breakthrough, which project team decides to work on. Design the newprocess. With input from previous stages, the project team can design a new process. Persons involved in process reengineering should constantly question which processes or tasks could be shut down, reengineered, or improved. In the case study, the project team adopted the idea of "bending pipes after pipes welded" instead of the existing "welding pipes after pipes bent" concept in redesigning the manufacturing processes of the pipe shop. The team members have discussed the new design from different aspects--management (impact of human resource), equipment (feasibility of hardware and software), and facilities (accompanied layout of the new manufacturing process) to refine the new manufacturing process. For example, managers from the design division had calculated the percentage of pipes that could fit well in the new design process, based on drawings of some existing ships, and convinced every team member that the new concept was feasible.
Standardize the new process. Before beginning a
new process reengineering project, it is necessary to standardize the new process if the organization tries to keep the performance as good as expected. Availability of qualified human resources, adequate equipment, and related documents are all important elements in standardizing the new process. In general, educating and training personnel in the new process environment is critical to maintain the same, if not better, performance. There are many books and papers that discuss process reengineering. For example, Hammer and Champy ~° and Roberts" are good sources to use to gain a better understanding of how to undertake a radical reinvention of the process. Because the new process is so dramatically different from the original process, it is common practice that top managers may feel that it is too risky to perform such a "revolutionary" change. During the interim of the case project, top managers hesitated regarding implementation of the new process, and project team members had difficulties agreeing on the possible performance improvement. With the use of an animated simulation model, the new layout could be justified. The next section discusses the simulation model development.
Implement the n e w p r o c e s s and modify the infrastructure. This stage is regarding the implemen-
tation of the new process. Note that the reengineered process should be fine-tuned as problems surface before and after installation. There is always a tradeoff in the implementation stage with cost, technology, and other issues. That is why the framework proposed has an iterative nature. During the case study period, the project team found that the animated simulation model, which will be discussed in the following section, is an important tool for effective communication among the team members and for the prediction of possible bottlenecks and expected performance of the new process. Measure the performance. Finally, one must determine the level of success of the reengineering project in terms of the goal set in the previous stage. As shown in many reports, an improvement of 50-60% in cost and productivity is a realistic objective. 9 A detailed discussion regarding the performance of the new process is shown in the following section.
Simulation Model Simulation is well recognized as a very useful technique for the design and evaluation of complex manufacturing facilities. !~ As computer hardware technology keeps advancing and more animated simulation software becomes commercially available, several studies have been conducted regarding the visual interactive simulation of a manufacturing system during the past decade.~3,14These studies, in general, have shown that the inclusion of animation as a simulation tool can enhance the presentation to users and improve the communication between managers and system programmers. With the addition of interactive control ability, users can halt the simulation experiment at any moment to view the statistics and/or change some parameters; insights into the system's behavior are then understood. The procedure to develop a visual interactive simulation model, accompanied with the practices in the case project, is shown as follows:
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was also a necessary input of the software to show how the parts move during the manufacturing process in the plant. Figure 4 shows a revised plant layout input in the computer. Verification and validation. The computer simulation model needs to be verified if it is to work as intended and reflect the operation of the real system. An animated simulation model is much easier to verify and validate because users can monitor the results of each activity on the screen. The output generated from the simulation model, based on the existing process, provides a benchmark to compare its "reality." Results and analysis. Output, such as the average production rate or the utilization of each workcenter, can easily be found and collected by simulation packages. Users can also experiment with alternative layouts to improve the performance of the system. The project team used simulation as a communication channel to examine the possible results of using different operating parameters in the job shop.
Define the goal. A good simulation model is one that covers only the system of interest and can provide answers for managers. An accurate definition of the goal is always required. The major concern of this project was the estimated production rate and the necessary number of workers on the shop floor for both the existing and new manufacturing process environment. The time to complete the simulation experiments also had to be as short as possible. Collect and input data. Sufficient and correct data must be available to formulate a simulation model and to execute the computer experiments thereafter. Information such as demands, routing files of the parts, processing time of the parts, moving time from location to location, and so on is usually required. Traditional time and motion studies and statistical analysis were conducted in this project to find the necessary information. Performance data from the new facilities was collected from vendors. Draw layout andpartflow diagram. For an animated simulation model, it is necessary to draw the layout for the background during the execution of the simulation model. During the project, the size of the pipe shop and the position of each machine were measured. Layouts for the new process and for the existing process of manufacturing pipes were drawn. A part flow diagram
In this study, Promodel PC version 5.0 is selected as the simulation software package) 5 This package provides an easy input/output interface, dynamic graphics presentation ability, and various analysis tools at an affordable price. The simulation models were built and executed on an IBM-compatible 486
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PC. Development of a simulation model for the project, including debug, took less than two weeks; however, it took more than three months to collect and verify the necessary input data.
of this finding is that there is no need to purchase a new overhead crane, although this had been suggested during the automation evaluation. An interesting observation is that the managers feel that the workers will have more pride and responsibility in the proposed new manufacturing process. That is, after related activities are designed and integrated into each workcenter in the new layout, the job of each worker is enriched. Workers are now involved in a larger portion of the manufacturing process and should be more motivated to improve their own working environment. Therefore, quality and productivity could be improved due to the human factor. Because the pipe shop is a division of CSBC, a nationally owned company, all the investments proposed were presented to the government for approval, which was granted. Currently, the pipe shop has started the purchasing process.
Results and Analysis Two types of analyses, static and dynamic, were conducted. Static analysis is well documented in many plant layout textbooks. One can calculate the moving distance of a pipe during the production process. The procedure is simply to put the layout on the table and go through the manufacturing process flowchart and part flow diagram to determine how a pipe is manufactured in the factory and how much moving distance is required. For example, it was found that the moving distance of a large straight pipe could be reduced from 228.5 meters in the existing layout to 136 meters in the new layout. Various similar calculations were done, and they all illustrated that the new layout was promising. Compared to the static analysis, simulation then is considered dynamic analysis. Most simulation models approach the manufacturing system dynamically so that arrival rates of demand and equipment utilization, for example, are all input as dynamic variables. Users examine the state of the simulation model evolving over simulated time, such as watching a conveyor system in a factory. Assuming the pipe shop operates 8 hours a day and 260 days a year, the output of the experiments on the simulation model depicts that the average production rate can be increased from 150 pipes daily to 195 pipes daily after the process is redesigned. The number of workers required in the proposed layout can be reduced from 67 to 60 workers. The labor productivity can therefore increase from 2.24 (150/67) to 3.25 (195/60)--a nearly 50% improvement in productivity. This dramatic improvement is due in part to the streamlined manufacturing process (kaizen approach) and to the use of some new facilities (automation approach). With the managers' knowledge that 10 persons are planning to retire in the next two years, the proposed layout can also reduce the pressure of recruiting workers. Another important simulation output shows that use of the overhead cranes can be reduced from 96 to 70 times daily in the new manufacturing process environment. This result is consistent with the top manager's ideal plant layout vision. The implication
Conclusions and Future Research Although the automation approach and the kaizen approach are quite different, this research shows that it is possible to combine both approaches for process reengineering. Based on the empirical results from the pipe shop in the case study, the improvement is dramatic. The following points summarize the information resulting from this project: 1. Think about the process instead of products and departments. 2. The proposed framework is effective and seems to be general enough to be applied to other types of process redesign. 3. A cross-department team is required, and good communication among team members is necessary. 4. Simulation is very important in process reengineering. 5. In redesigning a manufacturing process, human factors should be carefully considered. 6. Improvement performance in process reengineering can be very dramatic. As discussed above, use of a simulation technique is important in process reengineering. Although most simulation packages have a much better interface compared to that used in the past decade, managers and engineers in the case pipe shop felt that
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7. R. Latorre and L. Zeidner, "Computer-lntegrated Manufacturing: A Perspective," Journal of Ship Production (vl0, n2, 1994), pp99-109. 8. M. Imai, Kaizen: The Key to Japan's Competitive Success (New York: Random House, 1986). 9. G. Hall, J. Rosenthal, and J. Wade, "How to Make Reengineering Really Work," Harvard Business Review (Nov./Dec. 1993), pp I 19-131. 10. M. Hammer and J. Champy, Reengineering the Corporation (New York: Harper Business, 1993). 11. L. Roberts, Process Reengineering (American Society for Quality Control, 1994). 12. ET.S. Chan and A.M. Smith, "Simulation Approach to Assembly Line Modification: A Case Study," Journal of Manufacturing Systems (vl2, n3, 1994), pp239-245. 13. P.C.Bell and R.M. O'Keefe, "Visual Interactive Simulation--History, Recent Development and Major Issues," Simulation (v49, n3, 1987), ppl09-116. 14. M.E, Johnson and J.R Poorte, "A Hierarchical Approach to Computer Animation in Simulation Modeling," Simulation (v50, nl, 1988), pp30-36. 15. C. Harrell, ProModeIPC User Manual, Version 5.0 (PROMODEL, 1991). 16. J. Haddock, N. Seshadri, and V.R. Srivatsan, "A Decision Support System for Simulation Modeling," Journal of Manufacturing Systems (vl0, n6, 1992), pp484-491.
the design and implementation of a simulation model was too difficult for them. A decision support system for simulation modeling 16 seems to be a reasonable solution to this dilemma.
Acknowledgment The author thanks Mr. Ming-Hwa Phae for his programming efforts and Mr. Nan-Sun Lin for his helpful comments during the research period. The author is also grateful to Southern Illinois University at Carbondale for providing facilities during his sabbatical visit.
References !. C. Giffi, A.V Roth, and G.M. Seal, Competing in World-Class Manufacturing: America's 21st Century Challenge (Homewood, IL: Irwin, 1990). 2. G. Arndt, "Continuous Improvement in Manufacturing Based on 'Japanese Quality Techniques'," Robotics & Computer-Integrated Manufacturing (v9, n4/5, 1992), pp413-420. 3. K. Hitomi, "Manufacturing Technology in Japan," Journal of Manufacturing Systems (v12, n3, 1994), pp209-215, 4. V. Grover, K.D. Fiedler, and J.T.C. Teng, "Exploring the Success of Information Technology Enabled Business Process Reengineering," IEEE Transactions on Engineering Management (v41, n3, 1994), pp276-284. 5. "Japanese Shipbuilders Invest in Automation," Motor Ship (1990), pp14-16. 6. L.E. Williams Jr. and R.S. Oglesby, "A Survey of Shipboard Piping Design and Fabrication," Marine Technology (v20, n2, 1983), pp 107-149.
Author's Biography JrJung Lyu is an associate professor in the Department of Industrial Management Science at National Cheng Kung University (Tainan, Taiwan). He received his bachelor's degree in engineering science and master's degree in industrial management from National Cheng Kung University and his PhD in industrial and management engineering from the University of Iowa. He has participated in many projects supported by the National Science Council (Taiwan), China Shipbuilding Co., Taiwan Power Co., and private companies. He has also published several papers in international journals and written a book entitled Management Information Systems.
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