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Manufacturing on Demand in Production Networks
Manufacturing on Demand in Production Networks Professor Dr.-lng. Dr. h.c. E. Westkampfer (1) Fraunhofer-lnstitutfur Produktionstechnik und Automatisierung, Stuttgart, Germany Received on January 9,1997
Abstract In order to increase their competitiveness, companies optimize their production by outsourcing and integration of the most efficient suppliers. On the other hand, they try to fulfil specific requirements by extreme customer orientation and manufacturing on demand. This leads t o new organizational procedures and manufacturing systems. Their characteristics are: autonomous manufacturing cells, fractal units, adaptive systems, dynamic and agile management, selfoptimization and self-control, customer-specific order management, communication networks. Particulary ,,manufacturing on demand" and the order management in production networks require new methods. This paper deals with the management of networks with virtual elements and a new method for MRP which is based on the principles of dynamic integration between fractal units in production networks (agents) and includes learning methods for time and cost improvement. Kewords : Flexibitity, Manufacturing requirements planning (MRP), Fractals
1. Introduction During the last years, enterprises have increasingly oriented their production along the requirements of the market and the customers. The service life of the products and the number of variants has risen continually. At the same time, the quantities and the batch sizes have decreased. Apart from productivity, flexibility has become a deciding criterion for the development of new production concepts like, for example, the flexible manufacturing systems. Today, modern information and communication technology permits the complete integration of all business processes from the customer order up to the delivery of the products. The opening of production networks and immediately changeable (adaptive) company structures lead t o new concepts which allow an extreme customer orientation and production only by customer order, also called 'manufacturing on demand'. Central systems for the management of production and resources being the present state-of-the-art, however, are no longer able t o come up with the requirements of manufacturing on demand. They are too slow and inflexible for a highly dynamic order processing. Fig. 1 shows the development of the order situation, i.e. the value of all orders received by a company compared for the last three business years. While the loading is assumed as being normal, the orders received fluctuated by minus 40 % and plus 20 %. The structure of the orders on hand varied by more than 50 % in this turbulent development which is typical for many enterprises today. The order intake shows cyclic features reflecting the effects of economic development in the annual average. Presuming, however, shorter delivery times which do not permit any capacity alignment or delivery from
Annals of the ClRP Vol. 46/1/1997
stocks, fluctuations in the short-term range of more than 40 % would have t o be compensated merely by the flexibility of production.
Fig. 1: Annual value of customer orders A cost-optimal company management requires a constantly high loading of the existing resources. However, companies adapting themselves very closely t o the fulfilling of short-term customer requirements, t o shortest delivery times and minimal stocks, have t o realize that they will always operate beyond their optimal operating point. This paper deals with a concept showing how companies can adapt their structures more rapidly to the market requirements and how their order management can be optimized by new methods. 2. Thesis of New Manufacturing
Market
Requirements for
The conditions of the markets served by industrial enterprises can be characterized as turbulent. In fig. 2, the essential characteristics of the changed market conditions are formulated as theses.
329
I
IL Market reauirements
r 1 nTechnoloav .,,develooment n I
'I iL
shorter product life cycles rapid introduction t o the.market - .. permanent upgrading high quality and functionalitv
high innovation rates rapid dissemination of technological know-how intelligent products high process reliability
global competition
Fig. 2: Customer-oriented manufacturing turbulent market conditions
under
The service life of new products decreases due t o the high innovation rate in production technology. The moment where new products are introduced t o the market is decisive for the success. Through permanent upgrading and through marketing strategies, the number of variants rises very quickly. The customers' awareness of quality leads to a sudden increase of the requirements on the product safety and the reliability. Large free business fields and the worldwide operating trade stimulate the globalization of the markets. Under the pressure of international competition, the costs of the learning and experience curves follow with a large drop in prices. At the same time, a technological change is taking place which is mainly reflected in the product technologies. Today, new technologies are promptly available worldwide due t o a rapid communication. It is no longer possible t o derive long-term advantages from technological developments. Products are becoming more complex due t o the rising market and environmental requirements and due to the growing range of functions. The quantities produced decrease, and the number of variants increases. Temporary competition advantages can only be gained through high internal dynamics and the enterprises' capability of quickly adapting their production structures t o changes in the markets and the technologies. Consequently, a number of new strategies and philosophies have been developed during the last years in order to increase dynamics. The fractal enterprise, agile manufacturing, bionic manufacturingor holonic manufacturingare some of these new approaches t o improve the dynamic of the operational organization. [1,3,4,5,6,7] But these concepts mainly focus on the flexibility and adaptability of the companies' staff, the so-called 'human capital'. The step towards new technologyoriented concepts has not been taken by now. The most important reasons for the high turbulence in the markets, however, are in the quick availability of reliable information, in the information technology and in the worldwide standards of the communication technology. As a result of the enormous increase of performance with, a t the same time, a reduction of costs and the global availability of the knowledge how to use it, today, virtually any business operation can be carried out with computer assistance. The application systems dispose of quasistandards making their integration easier. The
330
networks are considered safe and non-controllable. This trend seems to be unbroken. Thus, it is near a t hand t o use this development also for the purposes and targets of production and to make information technology again the key to new production concepts. With the tools available in modern information and communication technology, there is a chance for the complete integration of all business processes in the whole process chain from customer t o customer. Here, the business processes can be laid out flexible and adaptable according to aspects of autonomy and dynamics. The vision of a future production based in principle on the autonomy of individual business processes and their open linkage and integration through the information and communication technology can be called 'manufacturing on demand'. Fig. 3 gives essential features of this production strategy. The business processes are laid out as decentral and independent, i.e. autonomous performance centres in the sense of fractal enterprises. [l] Correspondingly, these performance centres produce independent products and thus are in competition to each other. They are integrated in a network as virtual components [2,8] and are operating according to the TQM principles in a well-defined customersupplier relationship. The network comprises the whole process chain from customer to customer and includes the so-called 'teleservice'. Manufacturing happens only on customer demand. Information and Communication Technoloqv networked information systems distributed data management global networks - Intranet -Internet mulitmedia * virtual reality
manufacturingonly by customer order networked production with virtual elements productionwithout stocks just in time
modular productr module variability autonomous performance centres principles of fractal and agile production stable process chains
I
There are three important requirements t o be met when realizing this type of production: Structuring of the products based on system technology in order t o clearly define the interfaces in the customer-supplier relationships 2. Structuring of the performance centres based on system technology in order t o obtain a comprehensive and autonomous performance optimization 3. Structuring of the order management based on system technology 1.
In the following, these requirements are described more detailed. 2.1 Product Structuring Based on System Technology Today, many companies are already operating in cooperative networks. For example, the European aircraft industry has learnt within i t s AIRBUS programme t o develop even highly complex products in international cooperation and t o produce them by
division of labour on customer demand. In fact, this industry can be taken as an example of systemtechnical structuring of products and their allocation t o autonomous production structures. Similar approaches are followed by the European automobile industry through modularization of the products and involving competent suppliers in the development. These concepts are based on a hierarchic and systemtechnical structuring of the products as illustrated in a more generalized form in fig. 4. The system supplier is responsibleto the customer for the quality of the whole product. He keeps contact with the customers and defines the specific product configuration. As a rule, he is also responsible for the final assembly and inspection.
Fig. 4: Product technology
structure
based
on
system
production like, for example, the mechanical production is a complete system consisting of several subsystems such as the manufacturing cells. The subsystems again can be divided into further subsystems. They are linked with each other according to certain laws like the workpiece or tool cycle. There is a kind of customer-supplier relationship between the individual elements to which the methods of TQM are applicable. Fig. 5 shows the model of such a production on the example of the parts production. There can be seen a production segment (fractal) consisting of several manufacturing cells, the peripheral logistic systems and the information processing systems. The optimization of the complete system requires full control of the individual processes and their mutual influence. Analogously t o the concepts of flexible manufacturing systems, the complete system can be optimized preventively. This means that such a production segment has t o be operated in a way by one hand taking into account all influencing factors. Today, some enterprises are already following the way of entrusting the suppliers of the machine$and facilities also with their operation including the provision of technology, tools and equipment as well as the personnel. Thus, the machine supplier himself becomes an operator. In his value adding process, he takes the responsibility for the utilization and optimization as a provider of services with the machines produced by himself.
On the second level, the manufacturers of subsystems are responsible for the development and production of subsystems like the drive system or the guidance and steering systems, e.g., the cockpit of a car or the chassis. The subsystems can be further broken down up t o specific construction parts or standard parts. The structuring of products is always connected with the responsibility for the development, the design and the manufacture. In this way, it is possible to determine clearly the responsibilities of individual performance centres and to manage complexity even in large production networks more easily. 2.2 Structuring of Production Eased on System Technology Manufacturing enterprises are traditionally structured on the basis of labour division. Their structure still follows the philosophy of optimization through detailed planning and application of the classical methods of factory organization aiming a t the maximum utilization of the existing resources as regards technical capability and time. Here, the dominating features are the central planning and control. For the first time, the philosophies of the fractal or the agile enterprise are breaking with this tradition as they favour self-organization and selfoptimization: The employees themselves are responsible for the layout of the performance centres. There is no central planning. If the machines and facilities used in production are considered as complex products where the optimal utilization depends on a number of influencing factors, it is possible to use again system-technical principles for their optimization. A field of
Fig. 5: Model of a fractal production based on system technology Under the aspect of high dynamics and adaptability regarding the order situation and the medium-term order development, it is important to keep the capacities variable in such systems. This means that, depending on the capacity demand, subsystems have t o be kept changeable a t short notice. This can be done by 1. 2. 3. 4.
5.
application of universal machines replacing one another, "soft tooling", i.e. the exchange of programs, 'hard tooling", i.e. the exchange of tools and machine components, exchange of machines, variation of the layout and the logistics.
Today, it i s usual in parts production t o choose universal machines. CNC machining centres permit a quick changeover of workpieces, tools, fixtures and
331
NC programs. However, own investigations on the process reliability have shown that there are s t i l l considerable quality problems particularly’ in the single-piece and small-scale production and when starting the production of new parts.
Modular technical concepts were used for the first time in the US aircraft industry some years ago. They permit the automatic exchange of spindles when changing from light to heavy-duty machining. However, it is now t o look more deeply into the changeability of the capacities, no longer into concepts for machine changeover. If a system supplier becomes a provider of services, high efficiency can be reached due t o his interest in the value adding process and in additional profit. Therefore, the automobile industry has begun to realize such concepts t o increase performance and dynamics. The service provider acts as a supplier in the process chain and a t the location of the automobile manufacturer. He is involved by contracts relating t o the supply of single parts. The provision of any resources needed is completely left t o him. He engages himself t o supply on demand from a defined spectrum of tasks. Analogously to the parts production, system-technical aspects can also be applied to the layout and optimization of other fields. Even the assembly in a production with many variants can be structured according t o such aspects (fig. 6). However, in order t o achieve a high flexibility as regards customerspecific products that are t o be delivered within shortest time, solutions have t o found with which economical results can be yielded even with a strongly fluctuating loading. Thus, it is important in this case to produce variable product sequences with variable assembly methods. [9] The degree of automation has t o be high. At the same time, a welltimed, i.e. just-in-time supply has to be ensured.
Fig. 6:
Fractal flexible assembly
In the German automobile industry, concepts for the final assembly are presently being developed which can be characterized as follows: 1. 2.
modular product structure module variability 3. time phased flow assembly 4. flexible working time models with short-term adaptation t o the loading 5. mean degree of automation For the first time, the suppliers of a new automobile plant were ordered t o install the supplied modules by themselves using their own personnel. The degree of
332
automation of the assembly only depends on the technical necessities such as, e.g., an easy handling of the modules, accuracy of the joining processes or accessibility. According to first studies, the assembly time can be reduced t o less than 10 hours per car. The economical limit of loading declines t o less than 70 %. Modularization and “customizing‘ of the modules call for new assembly concepts for the processes preceding the final assembly. A better accessibility and a consequent design based on system technology enable high cost reductions with, a t the same time, an improvement in quality. The following conclusions can be drawn from these examples of new manufacturing and assembly concepts for a manufacturing on demand: 1.
2. 3.
4.
5.
The product layout and design based on systemtechnical and functional criteria is one of the most deciding fundamentals for the control of highly dynamic business processes. External and internal suppliers have the same status. Suppliers are hierarchically integrated in the process chain according to system-technical aspects. Their value added and their responsibility for the design, manufacture and assembly increase. The manufacturers of machines and facilities develop towards system operators with a spectrum of tasks and integration in the process chains that is similar t o those of the suppliers. All parties involved keep their resources available only temporarily. Depending on the demand, they are extended or reduced at short notice.
In this way, a virtual factory is born. This factory only works with the resources needed within short time for the execution of customer orders. Depending on the development of the demand, the capacities and structures are quickly adapted. Those enterprises will be successful which are able t o control the production network and to adapt it correspondingly to the development of the demand or the markets. For this type of a virtual enterprise, the order management is undoubtedly of decisive importance. It begins with the customer and ends with the delivery of the ordered products. Only new forms of order management and new methods on the basis of modern information and communication technology will fulfil this.
2.3 Structuring of the Order Management Based on System Technology Only a decentralized planning and control qualifies individual performance centres for short-term disposition according t o the order situation and for autonomy. If the cooperation relationships between autonomous performance centres in a production network are established following the principles of TQM where each manufacturer holds the responsibility for the quality, delivery dates and costs, smooth and efficient concepts will also be possible in the networked production.
Fig. 7 illustrates in a simplified way this type of cooperation. It i s based on the systematic structuring shown before. System Management
1
OrderAgent
I
terms of delivery. Fig. 8, for example, demonstrates how large time advantages can be gained in the order throughput by using so-called 'configurators' which increase the degree of technical clarification directly in the talks with the customer and are linked with the manufacturer's order and product data base.
Product Data Management fiactat
Fig. 7:
Logistic Competence
4
Distributed production planning and control
There are three steps of logistic and system competence t o be distinguished: 1.
2.
3.
The system supplier cares for the configuration and assembly of the products as agreed with the final customer. The manufacturer of components or modules, or the supplier of subsystems configurates and manufactures them as agreed with the system supplier. The manufacturer of single parts again cooperates exclusively with the supplier of subsystems.
Each participant in this network receives precise orders from his "customers". He is autonomous as regards the planning and disposition of his resources and the technical layout. Such typical cooperation partners can also be designated as 'fractals'. Their tasks, technologies and targets are different. Therefore, they have to use also different planning and control methods t o optimize their business processes. As regards information technology, they are linked with each other in the network through defined interfaces. So-called 'agent systems' may serve as methods for the order management. The system supplier uses order agents for defining the customer orders. By means of a systematic product configuration management defining each customer order specifically, they determine the extent of delivery for the subsystem suppliers and negotiate with them the terms of delivery as t o quantity, quality, delivery date and costs. Here, even competing subsystem suppliers can be involved if they accept the conditions of the network. The order negotiations between the subsystem supplier and his suppliers are similar. Today, information technology keeps methods on hand which support such communication and cooperation effectively even in complex structures and ensure a safe and quick exchange of information and data. System management, work-flow management, engineering-data management and product-data management are such aids. They are promising large improvements for the future. Already today, modern information technology permits t o get closer to the customer in order to clarify more precisely the extent of the order and the
Fig. 8: Customizing of orders assisted by telenetworks and configuration systems Such systems have already been developed in the consumer goods industry t o a degree that a complete integration up t o the inventory management and the financial handling can be reached. Automobile companies try to apply even virtual animation in their sales talks which enables the customer to execute the configuration and specification on his own within a company-wide concept, and which guarantees the feasibility and availability. The customer negotiates the configuration, the date of delivery and the prices with the system. As soon as the order is placed, the system guarantees him the de I ivery. In future, the specifications between the system suppliers and the subsystem suppliers will be handled in an integrated information-technical environment. It i s obvious to use the possibilities of information networks consequently for manufacturing on demand. For this, however, the present centralistic systems have to be completely replaced by decentral systems that are suitable for networks. The creation of new systems for the management of resources for companies operating in networks with virtual performance centres i s a completely new challenge for the operational organization. There are s t i l l missing new methods for the planning and control of individual performance centres like, e.g., the fractals, which permit self-organization and selfoptimization with permanently changing tasks in an environment t o be changed permanently. The simulation technology is a suitable method to optimize processes preventively. The old conventional methods of production planning and control are not applicable t o manufacturing on demand due t o their slow responding t o changed tasks. On the other hand, intelligent methods are needed for better utilizing of expert knowledge and experience in order t o improve the business processes. Furthermore, there are new requirements on the networked systems from the part of information technology. Thus, a lot of fundamental work is still needed t o find computer-assisted solutions also for these challenges. As regards
333
production planning and control (PPC) systems, however, there are already first network solutions with promising methods.
3. Manufadurinq Networks
On
Demand
in Production
Manufacturing On demand in production networks It aims at changes the company structures a production by customer Order and requires flexible and agile performance centres. The resources are adapted a t short notice. The order throughput from customer to customer is extremely accelerated. This kind of production involves the danger that the medium and long-term orientation is not considered sufficiently. Therefore, it is necessary t o integrate such organizations in a global system. p r i b u t e d communication and information systems
4.Conclusion This paper describes a strategy for future production based on the idea of fractal and aqile enterprises and guided by the possibilities of modern production networks. The actual aim i s to realize a type of enterprise operating very closely a t the market and only on customer demand a t the shortest delivery times possible. To achieve this, the adaptability of the capacities to specific demands has to be increased, and the order management has t o be modified correspondingly. Meanwhile, even virtual elemenb are imaginable if they can be integrated in the produdion networks. Furthermore, it is hold t h a t this strategy will only be if the and the production are equally structured according to system-technical aspects. The enterprise and factory structures will change dramatically also due t o the quick, cheap and safe as well as open communication networks. Those enterprises which have complete command of these networks will gain deciding advantages in international competition due to their nearness t o the customer and a dynamic organization. References
[l] Warnecke, H.J., 1993, The Fractal Company, A Revolution in Corporate Culture, Springer-Verlag, Berlin. Heidelbera. New York Fig. 9: Open manufacturing structure Fig. 9 finally illustrates the structure of an open enterprise with virtual elements and shortened process chains. As described before, product development, parts production, components production and assembly are integrated as autonomous performance centres in a network. The order management is customer-specific and oriented by certain market segments. For a temporary adaptation of the capacities t o the demand, external performance centres are involved as virtual elements if necessary. This network i s only accessible for performance centres which have accepted the conditions of the network as regards the functions, the information-technical interfaces and the quality. Today, enterprises are increasingly making use of global sourcing, i.e. products and components are bought where they are available a t low costs with sufficient capacity. These procurement markets have to be observed permanently in the same way as the own sales markets. This is where medium-term orientation i s needed because the exploitation of new sources just like new markets requires a careful analysis and preparation of the access to the network. In order t o shorten the distances to the customer, even the assembly processes can be dislocated t o the respective markets. In this way, the whole network changes into a global network. The aircraft, electronics and automobile industries have already chosen this way for a global strategy. The modern information and communication technology provides the platform on which they are able t o act cooperatively. The machine building industry will follow them.
334
[2]Iwata, K., Onosato, M., Teramoto, K., Osaki, S., 1995, A Modelling and Simulation Architecture for Virtual Manufacturing Systems, Annals of the CRP
44/1/1995 [3]Okino, N., 1994,Bionic Manufacturing Systems, In: Manufacturing Systems, 23 1994, The Search for Agile Manufacturing, Manufacturing Engineering, 11: 40-
[4] Noaker, P.M., 43
[5] Kidd, P.T., 1994, Agile Manufacturing Forging new frontiers, Addison Wesly, Wokingham [6]Hopf, M., 1994, Holonic Manufacturing Systems: The basic concept and a report of the IMD Test Case 5.. Sharing C I M Solutions: Proceedings of the Tenth CIM-Europe Annual Conference, 05-07.1 0.94 in Kopenhagen, Knudsen, J. K. H., MacConaill, P.A., Bastos, J. (eds.) IOS Press, Amsterdam, Oxford, Washington, 84-93 [7] Tonshoff, H.K., Winkler,M., 1994, Holonische Fertigungssysteme arbeiten autonom, VDI N vom
04.11.94:24-25 [8]Davidow, W. H., Malone, M.S., 1993, Das virtuelle Unternehmen: Der Kunde als Co-Produzent, Campus, FrankfuWMain, New York
[9]Feldmann, K., 1996, Relecance
Roth, N., Rottbauer, H., of Assembly in Global Manufacturing, Annals of the ClRP 45/2/1996
Abstract In order to increase their competitiveness, companies optimize their production by outsourcing and integration of the most efficient suppliers. On the other hand, they try to fulfil specific requirements by extreme customer orientation and manufacturing on demand. This leads t o new organizational procedures and manufacturing systems. Their characteristics are: autonomous manufacturing cells, fractal units, adaptive systems, dynamic and agile management, selfoptimization and self-control, customer-specific order management, communication networks. Particulary ,,manufacturing on demand" and the order management in production networks require new methods. This paper deals with the management of networks with virtual elements and a new method for MRP which is based on the principles of dynamic integration between fractal units in production networks (agents) and includes learning methods for time and cost improvement. Kewords : Flexibitity, Manufacturing requirements planning (MRP), Fractals
1. Introduction During the last years, enterprises have increasingly oriented their production along the requirements of the market and the customers. The service life of the products and the number of variants has risen continually. At the same time, the quantities and the batch sizes have decreased. Apart from productivity, flexibility has become a deciding criterion for the development of new production concepts like, for example, the flexible manufacturing systems. Today, modern information and communication technology permits the complete integration of all business processes from the customer order up to the delivery of the products. The opening of production networks and immediately changeable (adaptive) company structures lead t o new concepts which allow an extreme customer orientation and production only by customer order, also called 'manufacturing on demand'. Central systems for the management of production and resources being the present state-of-the-art, however, are no longer able t o come up with the requirements of manufacturing on demand. They are too slow and inflexible for a highly dynamic order processing. Fig. 1 shows the development of the order situation, i.e. the value of all orders received by a company compared for the last three business years. While the loading is assumed as being normal, the orders received fluctuated by minus 40 % and plus 20 %. The structure of the orders on hand varied by more than 50 % in this turbulent development which is typical for many enterprises today. The order intake shows cyclic features reflecting the effects of economic development in the annual average. Presuming, however, shorter delivery times which do not permit any capacity alignment or delivery from
Annals of the ClRP Vol. 46/1/1997
stocks, fluctuations in the short-term range of more than 40 % would have t o be compensated merely by the flexibility of production.
Fig. 1: Annual value of customer orders A cost-optimal company management requires a constantly high loading of the existing resources. However, companies adapting themselves very closely t o the fulfilling of short-term customer requirements, t o shortest delivery times and minimal stocks, have t o realize that they will always operate beyond their optimal operating point. This paper deals with a concept showing how companies can adapt their structures more rapidly to the market requirements and how their order management can be optimized by new methods. 2. Thesis of New Manufacturing
Market
Requirements for
The conditions of the markets served by industrial enterprises can be characterized as turbulent. In fig. 2, the essential characteristics of the changed market conditions are formulated as theses.
329
I
IL Market reauirements
r 1 nTechnoloav .,,develooment n I
'I iL
shorter product life cycles rapid introduction t o the.market - .. permanent upgrading high quality and functionalitv
high innovation rates rapid dissemination of technological know-how intelligent products high process reliability
global competition
Fig. 2: Customer-oriented manufacturing turbulent market conditions
under
The service life of new products decreases due t o the high innovation rate in production technology. The moment where new products are introduced t o the market is decisive for the success. Through permanent upgrading and through marketing strategies, the number of variants rises very quickly. The customers' awareness of quality leads to a sudden increase of the requirements on the product safety and the reliability. Large free business fields and the worldwide operating trade stimulate the globalization of the markets. Under the pressure of international competition, the costs of the learning and experience curves follow with a large drop in prices. At the same time, a technological change is taking place which is mainly reflected in the product technologies. Today, new technologies are promptly available worldwide due t o a rapid communication. It is no longer possible t o derive long-term advantages from technological developments. Products are becoming more complex due t o the rising market and environmental requirements and due to the growing range of functions. The quantities produced decrease, and the number of variants increases. Temporary competition advantages can only be gained through high internal dynamics and the enterprises' capability of quickly adapting their production structures t o changes in the markets and the technologies. Consequently, a number of new strategies and philosophies have been developed during the last years in order to increase dynamics. The fractal enterprise, agile manufacturing, bionic manufacturingor holonic manufacturingare some of these new approaches t o improve the dynamic of the operational organization. [1,3,4,5,6,7] But these concepts mainly focus on the flexibility and adaptability of the companies' staff, the so-called 'human capital'. The step towards new technologyoriented concepts has not been taken by now. The most important reasons for the high turbulence in the markets, however, are in the quick availability of reliable information, in the information technology and in the worldwide standards of the communication technology. As a result of the enormous increase of performance with, a t the same time, a reduction of costs and the global availability of the knowledge how to use it, today, virtually any business operation can be carried out with computer assistance. The application systems dispose of quasistandards making their integration easier. The
330
networks are considered safe and non-controllable. This trend seems to be unbroken. Thus, it is near a t hand t o use this development also for the purposes and targets of production and to make information technology again the key to new production concepts. With the tools available in modern information and communication technology, there is a chance for the complete integration of all business processes in the whole process chain from customer t o customer. Here, the business processes can be laid out flexible and adaptable according to aspects of autonomy and dynamics. The vision of a future production based in principle on the autonomy of individual business processes and their open linkage and integration through the information and communication technology can be called 'manufacturing on demand'. Fig. 3 gives essential features of this production strategy. The business processes are laid out as decentral and independent, i.e. autonomous performance centres in the sense of fractal enterprises. [l] Correspondingly, these performance centres produce independent products and thus are in competition to each other. They are integrated in a network as virtual components [2,8] and are operating according to the TQM principles in a well-defined customersupplier relationship. The network comprises the whole process chain from customer to customer and includes the so-called 'teleservice'. Manufacturing happens only on customer demand. Information and Communication Technoloqv networked information systems distributed data management global networks - Intranet -Internet mulitmedia * virtual reality
manufacturingonly by customer order networked production with virtual elements productionwithout stocks just in time
modular productr module variability autonomous performance centres principles of fractal and agile production stable process chains
I
There are three important requirements t o be met when realizing this type of production: Structuring of the products based on system technology in order t o clearly define the interfaces in the customer-supplier relationships 2. Structuring of the performance centres based on system technology in order t o obtain a comprehensive and autonomous performance optimization 3. Structuring of the order management based on system technology 1.
In the following, these requirements are described more detailed. 2.1 Product Structuring Based on System Technology Today, many companies are already operating in cooperative networks. For example, the European aircraft industry has learnt within i t s AIRBUS programme t o develop even highly complex products in international cooperation and t o produce them by
division of labour on customer demand. In fact, this industry can be taken as an example of systemtechnical structuring of products and their allocation t o autonomous production structures. Similar approaches are followed by the European automobile industry through modularization of the products and involving competent suppliers in the development. These concepts are based on a hierarchic and systemtechnical structuring of the products as illustrated in a more generalized form in fig. 4. The system supplier is responsibleto the customer for the quality of the whole product. He keeps contact with the customers and defines the specific product configuration. As a rule, he is also responsible for the final assembly and inspection.
Fig. 4: Product technology
structure
based
on
system
production like, for example, the mechanical production is a complete system consisting of several subsystems such as the manufacturing cells. The subsystems again can be divided into further subsystems. They are linked with each other according to certain laws like the workpiece or tool cycle. There is a kind of customer-supplier relationship between the individual elements to which the methods of TQM are applicable. Fig. 5 shows the model of such a production on the example of the parts production. There can be seen a production segment (fractal) consisting of several manufacturing cells, the peripheral logistic systems and the information processing systems. The optimization of the complete system requires full control of the individual processes and their mutual influence. Analogously t o the concepts of flexible manufacturing systems, the complete system can be optimized preventively. This means that such a production segment has t o be operated in a way by one hand taking into account all influencing factors. Today, some enterprises are already following the way of entrusting the suppliers of the machine$and facilities also with their operation including the provision of technology, tools and equipment as well as the personnel. Thus, the machine supplier himself becomes an operator. In his value adding process, he takes the responsibility for the utilization and optimization as a provider of services with the machines produced by himself.
On the second level, the manufacturers of subsystems are responsible for the development and production of subsystems like the drive system or the guidance and steering systems, e.g., the cockpit of a car or the chassis. The subsystems can be further broken down up t o specific construction parts or standard parts. The structuring of products is always connected with the responsibility for the development, the design and the manufacture. In this way, it is possible to determine clearly the responsibilities of individual performance centres and to manage complexity even in large production networks more easily. 2.2 Structuring of Production Eased on System Technology Manufacturing enterprises are traditionally structured on the basis of labour division. Their structure still follows the philosophy of optimization through detailed planning and application of the classical methods of factory organization aiming a t the maximum utilization of the existing resources as regards technical capability and time. Here, the dominating features are the central planning and control. For the first time, the philosophies of the fractal or the agile enterprise are breaking with this tradition as they favour self-organization and selfoptimization: The employees themselves are responsible for the layout of the performance centres. There is no central planning. If the machines and facilities used in production are considered as complex products where the optimal utilization depends on a number of influencing factors, it is possible to use again system-technical principles for their optimization. A field of
Fig. 5: Model of a fractal production based on system technology Under the aspect of high dynamics and adaptability regarding the order situation and the medium-term order development, it is important to keep the capacities variable in such systems. This means that, depending on the capacity demand, subsystems have t o be kept changeable a t short notice. This can be done by 1. 2. 3. 4.
5.
application of universal machines replacing one another, "soft tooling", i.e. the exchange of programs, 'hard tooling", i.e. the exchange of tools and machine components, exchange of machines, variation of the layout and the logistics.
Today, it i s usual in parts production t o choose universal machines. CNC machining centres permit a quick changeover of workpieces, tools, fixtures and
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NC programs. However, own investigations on the process reliability have shown that there are s t i l l considerable quality problems particularly’ in the single-piece and small-scale production and when starting the production of new parts.
Modular technical concepts were used for the first time in the US aircraft industry some years ago. They permit the automatic exchange of spindles when changing from light to heavy-duty machining. However, it is now t o look more deeply into the changeability of the capacities, no longer into concepts for machine changeover. If a system supplier becomes a provider of services, high efficiency can be reached due t o his interest in the value adding process and in additional profit. Therefore, the automobile industry has begun to realize such concepts t o increase performance and dynamics. The service provider acts as a supplier in the process chain and a t the location of the automobile manufacturer. He is involved by contracts relating t o the supply of single parts. The provision of any resources needed is completely left t o him. He engages himself t o supply on demand from a defined spectrum of tasks. Analogously to the parts production, system-technical aspects can also be applied to the layout and optimization of other fields. Even the assembly in a production with many variants can be structured according t o such aspects (fig. 6). However, in order t o achieve a high flexibility as regards customerspecific products that are t o be delivered within shortest time, solutions have t o found with which economical results can be yielded even with a strongly fluctuating loading. Thus, it is important in this case to produce variable product sequences with variable assembly methods. [9] The degree of automation has t o be high. At the same time, a welltimed, i.e. just-in-time supply has to be ensured.
Fig. 6:
Fractal flexible assembly
In the German automobile industry, concepts for the final assembly are presently being developed which can be characterized as follows: 1. 2.
modular product structure module variability 3. time phased flow assembly 4. flexible working time models with short-term adaptation t o the loading 5. mean degree of automation For the first time, the suppliers of a new automobile plant were ordered t o install the supplied modules by themselves using their own personnel. The degree of
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automation of the assembly only depends on the technical necessities such as, e.g., an easy handling of the modules, accuracy of the joining processes or accessibility. According to first studies, the assembly time can be reduced t o less than 10 hours per car. The economical limit of loading declines t o less than 70 %. Modularization and “customizing‘ of the modules call for new assembly concepts for the processes preceding the final assembly. A better accessibility and a consequent design based on system technology enable high cost reductions with, a t the same time, an improvement in quality. The following conclusions can be drawn from these examples of new manufacturing and assembly concepts for a manufacturing on demand: 1.
2. 3.
4.
5.
The product layout and design based on systemtechnical and functional criteria is one of the most deciding fundamentals for the control of highly dynamic business processes. External and internal suppliers have the same status. Suppliers are hierarchically integrated in the process chain according to system-technical aspects. Their value added and their responsibility for the design, manufacture and assembly increase. The manufacturers of machines and facilities develop towards system operators with a spectrum of tasks and integration in the process chains that is similar t o those of the suppliers. All parties involved keep their resources available only temporarily. Depending on the demand, they are extended or reduced at short notice.
In this way, a virtual factory is born. This factory only works with the resources needed within short time for the execution of customer orders. Depending on the development of the demand, the capacities and structures are quickly adapted. Those enterprises will be successful which are able t o control the production network and to adapt it correspondingly to the development of the demand or the markets. For this type of a virtual enterprise, the order management is undoubtedly of decisive importance. It begins with the customer and ends with the delivery of the ordered products. Only new forms of order management and new methods on the basis of modern information and communication technology will fulfil this.
2.3 Structuring of the Order Management Based on System Technology Only a decentralized planning and control qualifies individual performance centres for short-term disposition according t o the order situation and for autonomy. If the cooperation relationships between autonomous performance centres in a production network are established following the principles of TQM where each manufacturer holds the responsibility for the quality, delivery dates and costs, smooth and efficient concepts will also be possible in the networked production.
Fig. 7 illustrates in a simplified way this type of cooperation. It i s based on the systematic structuring shown before. System Management
1
OrderAgent
I
terms of delivery. Fig. 8, for example, demonstrates how large time advantages can be gained in the order throughput by using so-called 'configurators' which increase the degree of technical clarification directly in the talks with the customer and are linked with the manufacturer's order and product data base.
Product Data Management fiactat
Fig. 7:
Logistic Competence
4
Distributed production planning and control
There are three steps of logistic and system competence t o be distinguished: 1.
2.
3.
The system supplier cares for the configuration and assembly of the products as agreed with the final customer. The manufacturer of components or modules, or the supplier of subsystems configurates and manufactures them as agreed with the system supplier. The manufacturer of single parts again cooperates exclusively with the supplier of subsystems.
Each participant in this network receives precise orders from his "customers". He is autonomous as regards the planning and disposition of his resources and the technical layout. Such typical cooperation partners can also be designated as 'fractals'. Their tasks, technologies and targets are different. Therefore, they have to use also different planning and control methods t o optimize their business processes. As regards information technology, they are linked with each other in the network through defined interfaces. So-called 'agent systems' may serve as methods for the order management. The system supplier uses order agents for defining the customer orders. By means of a systematic product configuration management defining each customer order specifically, they determine the extent of delivery for the subsystem suppliers and negotiate with them the terms of delivery as t o quantity, quality, delivery date and costs. Here, even competing subsystem suppliers can be involved if they accept the conditions of the network. The order negotiations between the subsystem supplier and his suppliers are similar. Today, information technology keeps methods on hand which support such communication and cooperation effectively even in complex structures and ensure a safe and quick exchange of information and data. System management, work-flow management, engineering-data management and product-data management are such aids. They are promising large improvements for the future. Already today, modern information technology permits t o get closer to the customer in order to clarify more precisely the extent of the order and the
Fig. 8: Customizing of orders assisted by telenetworks and configuration systems Such systems have already been developed in the consumer goods industry t o a degree that a complete integration up t o the inventory management and the financial handling can be reached. Automobile companies try to apply even virtual animation in their sales talks which enables the customer to execute the configuration and specification on his own within a company-wide concept, and which guarantees the feasibility and availability. The customer negotiates the configuration, the date of delivery and the prices with the system. As soon as the order is placed, the system guarantees him the de I ivery. In future, the specifications between the system suppliers and the subsystem suppliers will be handled in an integrated information-technical environment. It i s obvious to use the possibilities of information networks consequently for manufacturing on demand. For this, however, the present centralistic systems have to be completely replaced by decentral systems that are suitable for networks. The creation of new systems for the management of resources for companies operating in networks with virtual performance centres i s a completely new challenge for the operational organization. There are s t i l l missing new methods for the planning and control of individual performance centres like, e.g., the fractals, which permit self-organization and selfoptimization with permanently changing tasks in an environment t o be changed permanently. The simulation technology is a suitable method to optimize processes preventively. The old conventional methods of production planning and control are not applicable t o manufacturing on demand due t o their slow responding t o changed tasks. On the other hand, intelligent methods are needed for better utilizing of expert knowledge and experience in order t o improve the business processes. Furthermore, there are new requirements on the networked systems from the part of information technology. Thus, a lot of fundamental work is still needed t o find computer-assisted solutions also for these challenges. As regards
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production planning and control (PPC) systems, however, there are already first network solutions with promising methods.
3. Manufadurinq Networks
On
Demand
in Production
Manufacturing On demand in production networks It aims at changes the company structures a production by customer Order and requires flexible and agile performance centres. The resources are adapted a t short notice. The order throughput from customer to customer is extremely accelerated. This kind of production involves the danger that the medium and long-term orientation is not considered sufficiently. Therefore, it is necessary t o integrate such organizations in a global system. p r i b u t e d communication and information systems
4.Conclusion This paper describes a strategy for future production based on the idea of fractal and aqile enterprises and guided by the possibilities of modern production networks. The actual aim i s to realize a type of enterprise operating very closely a t the market and only on customer demand a t the shortest delivery times possible. To achieve this, the adaptability of the capacities to specific demands has to be increased, and the order management has t o be modified correspondingly. Meanwhile, even virtual elemenb are imaginable if they can be integrated in the produdion networks. Furthermore, it is hold t h a t this strategy will only be if the and the production are equally structured according to system-technical aspects. The enterprise and factory structures will change dramatically also due t o the quick, cheap and safe as well as open communication networks. Those enterprises which have complete command of these networks will gain deciding advantages in international competition due to their nearness t o the customer and a dynamic organization. References
[l] Warnecke, H.J., 1993, The Fractal Company, A Revolution in Corporate Culture, Springer-Verlag, Berlin. Heidelbera. New York Fig. 9: Open manufacturing structure Fig. 9 finally illustrates the structure of an open enterprise with virtual elements and shortened process chains. As described before, product development, parts production, components production and assembly are integrated as autonomous performance centres in a network. The order management is customer-specific and oriented by certain market segments. For a temporary adaptation of the capacities t o the demand, external performance centres are involved as virtual elements if necessary. This network i s only accessible for performance centres which have accepted the conditions of the network as regards the functions, the information-technical interfaces and the quality. Today, enterprises are increasingly making use of global sourcing, i.e. products and components are bought where they are available a t low costs with sufficient capacity. These procurement markets have to be observed permanently in the same way as the own sales markets. This is where medium-term orientation i s needed because the exploitation of new sources just like new markets requires a careful analysis and preparation of the access to the network. In order t o shorten the distances to the customer, even the assembly processes can be dislocated t o the respective markets. In this way, the whole network changes into a global network. The aircraft, electronics and automobile industries have already chosen this way for a global strategy. The modern information and communication technology provides the platform on which they are able t o act cooperatively. The machine building industry will follow them.
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[2]Iwata, K., Onosato, M., Teramoto, K., Osaki, S., 1995, A Modelling and Simulation Architecture for Virtual Manufacturing Systems, Annals of the CRP
44/1/1995 [3]Okino, N., 1994,Bionic Manufacturing Systems, In: Manufacturing Systems, 23 1994, The Search for Agile Manufacturing, Manufacturing Engineering, 11: 40-
[4] Noaker, P.M., 43
[5] Kidd, P.T., 1994, Agile Manufacturing Forging new frontiers, Addison Wesly, Wokingham [6]Hopf, M., 1994, Holonic Manufacturing Systems: The basic concept and a report of the IMD Test Case 5.. Sharing C I M Solutions: Proceedings of the Tenth CIM-Europe Annual Conference, 05-07.1 0.94 in Kopenhagen, Knudsen, J. K. H., MacConaill, P.A., Bastos, J. (eds.) IOS Press, Amsterdam, Oxford, Washington, 84-93 [7] Tonshoff, H.K., Winkler,M., 1994, Holonische Fertigungssysteme arbeiten autonom, VDI N vom
04.11.94:24-25 [8]Davidow, W. H., Malone, M.S., 1993, Das virtuelle Unternehmen: Der Kunde als Co-Produzent, Campus, FrankfuWMain, New York
[9]Feldmann, K., 1996, Relecance
Roth, N., Rottbauer, H., of Assembly in Global Manufacturing, Annals of the ClRP 45/2/1996