The potential of group technology for U.S. manufacturing

JOURNAL

OF OPERATIONS

MANAGEMENT

Vol. 4, No. 3. May 1984

The Potential of Group Technology U.S. Manufacturing

For

NANCY LEA HYER*

EXECUTIVE

SUMMARY

Group Technology (GT) is an innovative approach to batch production which seeks to rationalize a variety of aspects of the conversion process by recognizing and exploiting the underlying sameness which exists among component parts, end items, raw materials and so forth. The majority of GT applications, however, focus on identifying and capitalizing on component part similarities. The central theme of GT when applied to this class of items is the formation of part families based on design or manufacturing similarities (or both). Although the basic principles of GT were described and applied overseas as early as 1950, it is only in the past ten years that any significant and sustained U.S. interest in GT has surfaced. In an effort, first, to determine the status of GT use in the U.S. and, second, to provide some insights as to the desirability of GT for U.S. manufacturers, data was collected on twenty U.S. firms known to use this innovation. A fifteen page questionnaire was employed to gather information on (I) the characteristics ofthese firms which use GT, (2) the ways in which GT has been applied at these companies and (3) the costs and benefits of these GT programs. The results of this survey, described below, provide an overview of GT practices in a sample of U.S. firms and indicate the potential usefulness of this innovation for a broad spectrum of U.S. manufacturers. The survey responses indicate that GT is a multifaceted tool which can be applied to a variety of problems in a variety of industrial settings. GT has been adopted by both large and small installations involved in the manufacture of metal items produced in small to medium quantity lots. Although no applications were identified outside metalworking, the range of metalworking industries in which GT had been implemented is quite broad. Universally, GT was adopted in response to a particular problem or set of problems. Frequently, the need to curb excessive lead times motivated firms to introduce GT. In terms of implementing and using GT there were a number of interesting findings. First, the survey results confirm that GT is more than cellular manufacturing. In fact, the most popular application of GT was in manufacturing engineering, particularly as an aid in rationalizing the process planning function. Seventy-five percent of the tirms had used GT in manufacturing engineering, while fifty-five percent had set up one or more production cells and an equal number had applied GT to product design. A second interesting finding was that, for the majority of firms, informal procedures for identifying and grouping similar items (i.e. by visual inspection or informed judgement) proved inadequate for pursuing GT applications. Consequently, eighty-five percent of the respondents noted that formal classification and coding schemes had been used to aid in identifying and exploiting item similarities. The survey also yielded interesting results with respect to the problems encountered in implementing GT. The firms reported that regardless of the type of application (i.e., product design, manufacturing engineering or cellular manufacturing), human resistance to change was the

* University

of North

Carolina-Chapel

Journal of Operations

Hill, Chapel

Management

Hill, North

Carolina.

183

most serious impediment to successfully introducing GT. This obstacle could be surmounted, in most instances, by GT education and by involving those atktcd by CT as early in the implementation process as possible. A number of other problems specific to the type of CT application were also noted. With regard to the relative ease of implementing CT in various areas, the respondents generally agreed that establishing cells is fraught with more difficulties than are GT applications in manufacturing engineering or product design. With respect to costs and benefits, 85% of the firms reported that the actual benefits from CT met or exceeded their anticipated benefits. Specific savings frequently mentioned included reduced lead times and easier preparation of process plans. Costs for planning the GT program and for purchasing additional computer hardware and software were the most commonly cited GT-related expenses. In terms of prerequisites for success in implementing CT, the overwhelming majority of respondents agreed that two elements are essential. The first is GT education for all those (managers, supervisors and line personnel) who are affected by the changes that accompany GT’s introduction. The second critical factor is top management’s commitment to CT principles and support for the personnel involved in directing the GT efforts. Thus, to the extent manufacturers, one commitment to CT variety of problems

that the firms included here are representative of a broader spectrum of U.S. can conclude that in the presence of top management encouragement and a education, batch manufacturers involved in metalworking and facing any of a could benefit from putting into practice GT principles.

INTRODUCTION Group Technology (GT) is an innovative approach to batch manufacturing which seeks to rationalize small-lot production by capitalizing on the similarities which exist among (primarily) component parts. The central theme of GT when applied to component parts is the formation of part families on the basis of design or manufacturing similarities (or both). Once formed, these part families can be used to achieve efficiencies in, primarily but not exclusively, (a) product design, (b) manufacturing engineering and (c) cellular manufacturing. The organization of part families by design similarity, usually accomplished through the application of formal classification and coding schemes, is useful in that component variety may be reduced and systematic design retrieval procedures may be introduced. When part families are formed on the basis of their manufacturing similarities they can be used to improve many manufacturing engineering functions or may impact the layout of the production facility itself. Traditionally, the manufacture of batches of component parts has taken place in a functional layout with similar machines (processes) placed together in one area of the production facility (see Figure la). Thus, during the production process, batches move through various work centers according to a specific sequence of operations. When a functional layout is maintained, part families may be used to reduce set-up, queuing and total lead time. This is accomplished by machining similar parts (members of the same component part family) one after another, so that only minor changes in machine set-up are necessary. The extreme application of part families organized by manufacturing similarities entails the rearrangement of the production facility itself by introducing cellular manufacturing. In cellular manufacturing, groups of machines on which a part family or set of part families may be produced are identified and physically placed together in one area of the production facility (see Exhibit 1b). These machine groups are called production cells, and their use can result in a series of significant benefits, including lower inventories, shorter lead times and increased human effectiveness [ 1, 16, 171.

184

APES

FIGURE Functional a.

1

and Group

Functional

Layout

Layout

t w? b.

1

M

u

Group

Layout

I3tf

lzl M

*

--

El

0

Y

I-1

CO

co

Journal of Operations

Management

rl --I-

EG

--I-

GT’s Background GT was originally developed in the Soviet Union during the late 1940’s and early 1950’s. Over the past thirty years, GT has been studied and applied in most of the East and West European countries, and in several Asian countries as well (India, Hong Kong and Japan, for example) [ 1, 9, 16, 181. It is only over the past ten years, however, that any significant and sustained U.S. interest in GT has surfaced. Despite this lag, a small but growing body of U.S. publications on GT has recently appeared, and an increasing number of U.S. firms have begun to apply GT principles. This paper focuses on the experiences of a set of U.S. manufacturers in applying GT. The analysis of the application of GT in these companies serves as a vehicle for assessing (1) GT’s applicability to U.S. manufacturing, and (2) the potential of GT to generate significant benefits for firms which adopt it.

PREVIOUS

LITERATURE

ON

THE

APPLICATION

OF

GT

IN THE

U.S.

Literature on the use of GT among U.S. manufacturers has been limited. The first accounts of GT use in the U.S. appeared in the early seventies and, in general, presented sketchy summaries of the application of GT in one or at most a few firms [5, 6, 7, 8, 10, 13, 14, 15, 20, 22, 25, 26, 27, 29, 301. The generalizability of the experiences of the firms included in these vignettes was quite restricted: the absence of detailed information on the firms and their use of GT made it difficult to ascertain how and where GT could be successfully used in U.S. manufacturing. Furthermore, the companies included in these descriptions had, for the most part, initiated GT programs quite recently and, thus, strong conclusions concerning the merit of GT could not be drawn. In addition, with sample sizes of only one or two, it was not possible to make any industry-wide statements concerning i GT’s applicability. Not until 1977 were reports published which dealt with the application of GT in a large number of U.S. companies [ 11, 121. These publications, authored by Ham and Reed, discussed the results of a brief questionnaire on GT use which had been distributed to over 300 U.S. firms in the metalworking industries. Of the 113 respondents, approximately 44% reported that they did in fact use GT. Unfortunately, most likely due to the brevity of the questionnaire and the nature of the information gathered, detailed results focusing on how GT had been applied and the costs and benefits of its use were not published. In 1978 the K. W. Tunnel1 Company, an international consulting firm, undertook a more in-depth assessment of GT’s application in U.S. industry. The resulting publication, Group Technology-A Review of the State-of-the-Art in the United States, which received only limited circulation, presented a managerially-oriented discussion of the application of GT in a group of approximately twenty U.S. firms [19]. At the time of the study the firms were at various stages of considering and implementing GT. The discussion of the application of GT in these companies is quite general, although reference is made to the use of GT at individual firms. While informative, the trends in GT use receive little attention, and detailed data on the characteristics of installations using GT and the costs and benefits of these GT programs were not presented. It is the purpose of this paper to attempt to focus on some of the issues not adequately covered in these earlier studies by discussing in detail the results of a recent survey of U.S. GT users. The goal is not only to describe the users and uses of GT but also to use this

186

APICS

information to draw some conclusions U.S. manufacturers.

concerning

GT’s applicability

and desirability

for

METHODOLOGY The findings of this paper are based on the responses to a mail questionnaire which was distributed to known U.S. users of GT. In the following paragraphs, the identification of potential respondents and the construction and distribution of the survey are outlined. It is difficult to ascertain the actual number of U.S. firms using GT. The Ham and Reed study reported approximately fifty companies (the names of the companies, however, were not provided) and the K. W. Tunnel1 study noted twenty firms. It is almost certain that since the time of these studies (1976, 1978) additional companies have begun to use GT. However, the identities of most of these companies are unknown. At the time this survey was undertaken, the thirty firms contacted represented the universe of U.S. GT users to whom references could be found in published sources. An extensive search of the literature (over 700 pieces were reviewed) yielded only these names. Of these thirty, twenty firms provided information on the use of GT in their company. Given this fairly significant number of GT users represented, it may be possible to make some general statements concerning GT’s application and applicability. The purpose of the questionnaire was to gather information pertaining to the application of GT at various U.S. firms. Detailed information was collected on the following topics: (1) firm characteristics (size, product line, production planning and control environment and so forth), (2) factors surrounding the decision to adopt GT, (3) the use of GT in product design, manufacturing engineering and cellular manufacturing, and (4) costs and benefits of the GT program. In addition, respondents were asked for their assessment of GT’s potential in U.S. industry in general. Both open-ended and structured response questions were included in the survey. For the latter case, scaled (Likert-type) response formats were frequently employed. After the questionnaire was designed it was pilot tested, revised and then distributed to known U.S. users of GT. Prior to distribution potential respondents at the individual firms were contacted by phone to assess their willingness to participate. As mentioned earlier, twenty firms agreed to provide information and did in fact return the completed survey. The individuals who responded to the survey (one respondent per firm) included plant managers, vice-presidents, department managers, chief engineers and specialists in charge of their firm’s (or division’s) CAD (computer aided design), CAM (computer aided manufacturing), CAPP (computer aided process planning), or manufacturing technology programs. All held management positions and, judging by the detail of their responses, had an intimate knowledge of their firm’s experiences with GT. RESULTS Types of Firms

Which

Use GT

While the information gathered pertaining to the characteristics of GT users fails to define a precise profile of GT using installations, it does challenge many casual presumptions as to the limited utility of this innovation. The data presented in Table 1 shows GT users to be producers of a wide variety of items typically manufactured in relatively small lots.

Journal of Operations

Management

187

TABLE 1 Part Variety and Batch Size For Survey Respondents Part Variety Variable

High

Low

Mean

Median

Number of components Number of sub-assemblies Number of end items Number of new components per year

25oooo 200000 4000

5000 200 5

72800 16190 907

43500 4500 425

30000

100

6007

2000

Low

Mean

Median

1 800 15

8.9 6122 757

4 2000 75

Batch Sizes Variable Smallest batch quantity Largest batch quantity Typical batch quantity

High 50 20000 5000

In quite a few instances, these batches are produced in a job shop or modified job shop format. In fact, as shown in Table 2, approximately 80% of all the respondents have maintained some segment of their facilities organized for traditional batch manufacture; that is, set up as a functional layout. CT using installations rely heavily on the computer as a tool for production planning and control, and are, most likely, users of MRP. This integration of GT and MRP in practice lends support to recent research efforts which have hypothesized the compatibility of these two approaches [3, 17, 2 1, 23, 24, 281. In fact,

TABLE 2 Plant Layouts Layout Type

% of Firms

Only job shop Only cells Only assembly lines** Job shop and cells Assembly line and job shop Assembly line and ceils Assembly line, job shop and cells

30 5 5 25 5 5 20

Number of Firms*

Use of Job Shop

Job shop, atone or in ~mbination with other lavouts

SO

16

* One firm did not provide information on this variable. ** Given the natural suitability of GT to batch manufacturing the use of GT in a pure assembly operation was surprising.

188

APICS

75% of the firms were users of MRP and all but one employed the computer to aid in a variety of tasks associated with production planning and control. The firms using GT were all engaged in metalworking production of some sort, although not limited to any one particular metaiwor~ng industry. Table 3, a listing of the wide variety of industries in which GT users were found, shows that the range of industries in which GT has been introduced is quite broad. Interestingly, the GT using installations were not of any particular size: GT has found application in both very large and quite small organizations. Size of the plant in which GT was applied was measured a variety of ways, including number of employees, number of machine tools, square feet of plant and dollar volume of output (see Table 4). Not only was the range on each of these variables quite large, but the frequencies of occurrence were fairly evenly distributed across the entire range for each variable. Factors Surrounding the Decision to Adopt GT

Firms included in the study became interested in GT as early as 1961 and as late as 1980. The mean year of initial interest, however, was 1974 and the median was 1975. Thus, the mid-70’s appear to be the most common period in which these U.S. firms began to consider GT. The most frequently cited source of initial exposure to GT was contact with another U.S. user of GT. Many of these contacts reportedly were made at a series of conferences on GT and GT-related areas (for example, classification and coding) sponsored by practitioner-oriented organizations such as CAM-I (Computer Aided ManufacturingInternational) and SME (Society of Manufactu~ng Engineers). In terms of actually initiating a GT program, the firms universally noted that GT was tried in response to a particular problem or set of problems rather than as a means of general manufacturing improvement. The most frequently cited problem was excessive

TABLE 3 Industries Identified As GT Users Aerospace Agricultural Machinery Automotive Business Machines Cargo Airplanes Control Devices Die& Engine Assemblies Envelope Machinery and Accessories Heavy Duty Trucks Hydraulic Pumps and Valves Industrial Lift Trucks Lamp Making Machinery Machine Tools Machined Parts Manual And Hydraulic Service Tools And Equipment Mechanical Seals, Hydraulic Check Valves Nuclear Weapons Oil Wells

Journal of Operations Management

189

TABLE 4 Variables Related To Size of Plant In Which GT Had Been Applied Variable

Low

High

Mean

Median

Plant size in square feet Dollar volume of 1981 output (in 100,000’s) Number of employees Number of machine tools

106,000

4,000,000

976,000

750,000

24 300 90

500 17,000 3,000

137 3,510 820

110 3,100 500

lead time: 75% of the firms noted that this was a weakness which motivated them to try GT. High work-in-process inventory costs, high part production costs and poor delivery performance (linked to excessive lead time) were also reported by several firms as the most important problem to which GT was addressed. Uses of GT The potential uses of CT were divided into three categories: uses of GT in product design, uses of GT in manufacturing engineering, and cellular manufacturing. In general, the firms were asked whether or not they used GT in each of these categories, and if they did, how they used it. Firms were also asked what problems they had encountered in applying GT and how they had attempted to overcome any problems. Following a brief summary, each of these three areas will be discussed in turn. Summary of GT Uses Table 5 summarizes the uses of GT which were identified by the survey. The most common use of GT reported by the firms was in manufacturing engineering, to which GT had been applied by 75% of the firms. Product design and cells each claimed 55% of the users. The latter half of Table 5 looks at combinations of uses. Twenty percent of the firms used GT solely in the area product design, while another 25% applied GT only to manufacturing engineering. The remaining 55% of the firms had applied GT to more than one area: 20% had applied GT to manufacturing engineering and cellular manufacture, 5% used GT in product design and manufacturing engineering and 30% used GT in all three areas. Product

Design

Of the twenty firms which responded, 55% had applied GT to the product design area. Of those that did not, two had developed GT design applications scheduled to come on line in 1983. The prerequisite for applying GT to product design appeared to be the coding of all or most existing parts. Next, families of similar parts which share certain design related attributes (shape, size, feature configuration) had to be identified. In the companies which used GT in product design, a variety of applications were identified. GT was frequently used for design retrieval, (retrieving designs from a file for the purposes of obtaining relevant design information and utilizing existing designs in new products), design standardization and variety reduction. These uses were reportedly accomplished in a number of ways. For example, when items were initially coded duplicate

190

APES

TABLE 5 Summary of GT Uses General

Use

Number

of Firms I1 15 I1

Product design Manufacturing engineering Cellular manufacture Combination

% of Firms That Have Applied CT to This Area 55 75 55

Uses of CT

Number

of Firms 5 4 4

Manufacturing engineering (alone) Product design (alone) Cells and manufacturing engineering Cells and product design Cells, product design, and manufacturing engineering

% of Firms That Have Applied CT to These Combinations of Areas

1

25 20 20 5

6

30

parts having identical code fields were combined. It was also noted that insignificant differences in parts with highly similar codes were sometimes identified and, with only minor alterations, these similar parts could be reduced to a single component. Creation of new parts was avoided by first searching the part family to which the new part (if created) would belong. When this was done, an existing design was often discovered which could be used in lieu of creating yet another new part. Firms also reported that, in some instances, it was possible to modify existing designs and thus avoid a significant portion of the new design costs. Most firms were able to reduce the number of new parts created per year. An important related issue is that over half the firms which used GT in product design used it in conjunction with CAD. Table 6 summarizes the variety of reported uses for GT in

TABLE 6 GT Use In Product

Use Standardization of existing parts Design retrieval Avoid unnecessary new designs Provide information about part families or parts which share a common trait Computer aided design Create new parts consistent with existing part families and manufacturing methods

Journal of Operations

Management

Design

90 of Firms Using CT in Product Design

Number of Firms (of 1 I)

13 73 45

8 8 5

36 36

4 4

9

1

191

the product design area and gives the percentage of firms who had utilized GT in a given fashion. Approximately 80% of the firms which used GT in product design had encountered problems or obstacles in pursuing this application. The most commonly cited di~~ulty was resistance to change. One manager noted that there was a “problem of inertia” in first getting designers to code parts and second, in convincing them to use the coded information as an aid to design. An executive of one company identified the source of this inertia, at least in his firm: There is a resistance of design engineers to use the data base to check existing designs and to accept the discipline required to seek a satisfactory solution with a new combination of existing designs or minor modifications. In the past, recognition for engineers had been based on the number of new parts created, rather than on the number of new designs avoided. The companies that had experienced such problems noted that these difficulties were at least partially overcome through education. One executive noted that, “frequent training sessions and seminars” had helped overcome human inertia. Efforts to show product engineers how product costs could be avoided and a change in the incentive system (designers were now compensated, in part, by the number of existing designs employed in multiple applications) were reported by one firm as a satisfactory solution to the problem of unwillingness to change. Other problems mentioned included that the coding system most appropriate for the design area did not necessarily meet the needs of manufactu~ng and process planners. This was overcome in one firm by introducing two separate codes, one for each area. A similar problem was identified by another respondent who stated that many features of the items to be coded did not lend themselves to coding; that is, too many code fields would be required to adequately reflect the totality of possible dimensions of a given set of items. A solution to this problem had not as yet been found. Manufacturing

Engineering

Seventy-five percent of the respondent firms used CT in manufacturing engineering. (Here the term “manufa~tu~ng engineering” also refers to areas such as scheduling and sequencing not typically covered by this rubric.) Of the firms that used GT in manufacturing engineering, all but one did so through the formation of part families. About half these firms identified families through classification and coding. Another one third used classification and coding in conjunction with informal visual identification or with production flow analysis [2, 3, 41. The remainder of the respondents who formed part families for use in manufacturing engineering applications used informal grouping or a firm-specific approach. A variety of manufacturing engineering uses of GT were identified and are summarized in Table 7. The most frequently cited manufactu~ng engineering applications of GT were the development of standardized routings for families of parts and the preparation of process plans in general. (Process plans are the manufacturing instructions which indicate the stepby-step sequence of operations necessary to produce a given item.) 73% of the firms using GT in manufactu~ng engineering elected one or both of these applications. The use of

192

TABLE 7 GT Uses In M~ufaet~ng

Use

Engineering

% of Firms Using GT in Manufacturing Engineering

Number of Firms (of 15)

13

II

73 67

11 10

47

7

34 34

5 5

1. Develop standardized routings for families

of parts 2. Assist in preparation of process plans and method sheets 3. Develop common tooling 4. Assist in sequencing parts on individual machines 5. Identify subsets of machines in each department which will be dedicated to the production of a family or families 6. Assist in scheduling NC machines 7. Assist in the production of master NC programs which are in turn used to produce NC tapes 8. Assist in estimating capital equipment needs

7 7

GT to identify common tooling was reported by 67% of those firms who used GT in manufacturing engineering. A particularly interesting use was in conjunction with NC machines. GT part families were reportedly used in a number of plants to assist in sequencing parts on, and programming the control tapes for, NC machines. As with GT’s use in product design, the most commonly encountered obstacle to the successful GT applications in manufacturing engineering was resistance to change, that is, the difficulty of getting individuals to adopt a new discipline. One firm noted that material managers were tempted to change the monthly quantities which had been established for the part families, and another manager reported that “old school” thinking on set-up and inventory trade offs caused frequent conflicts. Several other individuals echoed these same concerns. An interesting comment was made by a respondent who’s firm had initiated GT in the last two years. He noted that resistance to change in the case of his firm: stemmed from concern over job security. That is, many employees feared the consequences of the firm’s decision to implement a new production planning technology with all its productivity improvements in a declining economy and business environment. Seminars, management and operator training, “hand holding” and a variety of similar educational efforts aimed at informing people about GT and its role were stressed as at least partial solutions to these difficulties. A second problem area mentioned by users was the high initial cost of introducing GT in manufacturing engineering_ According to one executive, the benefits were not realized until after major changes were made, such that the level of commitment required was “very big,” and must be made before significant savings materialize. Another noted that it took a lot of money to implement the manufacturing engineering changes throughout

Journal of Operations Management

193

the plant. Both respondents felt that “campaigning for GT” and documentation of the benefits, however small, which accrued to the use of GT, could be used to garner the support and commitment necessary to insure that needed funds would continue to be made available. Cellular Manufacturing Of the firms which responded over half (55%) used cellular manufacturing. The number of cells actually in operation per plant ranged from one to 48, with a median value of five and an average of nine. The cells themselves consisted of from three to twenty-four machine tools and were used to manufacture a variety of items including both machined and fabricated parts. Many cells were devoted to the production of rotational parts. (For a complete description of the types of parts made in cells at various companies, see Table 8.) In general, the parts produced in cells constituted only a small percentage of the components manufactured in each plant: cell output averaged 10% and ranged from .Ol to 30% of a given plant’s component part production. In establishing the cells, firms generally followed the same sequence of major steps. Typically, the first step was to identify the parts which could be produced in cells. Parts with similar code numbers, which looked alike, or which required the same (or nearly the same) sequence of manufacturing operations were frequently selected as candidates for cellular manufacture. In addition, one firm chose as cell parts the components of a delivery sensitive product. After initially selecting the parts to be produced in cells, the firms spent considerable energy analyzing the annual volumes, material types and process requirements of the candidate parts. The purpose of this analysis was to select the machines which would become part of the cells. About a third of the firms indicated that having chosen the families to be made in the cells, the machines required became obvious. Several firms used standard industrial engineering analysis techniques to select the appropriate machine tools while three others indicated that matrices consisting of part codes and machine requirements where employed to identify which machines to include in various cells. One company used “GT software” as an aid. Approximately 80% of the firms using cells indicated that constraints

TABLE 8 Parts Made In Cells* 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Cubic parts (either small, medium or large) Rotational parts (2 firms) Flat, plate-type parts Machined parts such as steering knuckles, axles, sheaves, endheads Fabricated parts such as forks and sheet metal parts Simple NC machine-center parts Marking systems tagger, meter covers die shell units, mailing machine base, scale parts Component parts of iron or brass Mechanical seal components, hydro-check valve components Parts for hydraulic components, drive trains and chain sprockets, parts turned from bar stock.

* Parts are described as they were reported by the respondents. In some cases, shapes or types were described, in others the specific parts were reported.

194

APICS

on available machinery, machine utilization requirements, and other factors necessitated revisions in the set of parts originally earmarked for production in the cells. The final step in setting up the cells involved the actual relocation of machinery. Some of these various approaches to establishing cells are summarized in Figure 2. The most interesting information provided by these users of cellular manufacturing pertained to the obstacles they had encountered in setting up and operating the cells and how these problems were overcome. Table 9 summarizes these problems and solutions. As with the previously discussed uses of GT, the most frequently reported problems focused on the difficulty of getting human beings to change. In cellular manufacturing, however, these problems were frequently confounded by the existence of labor unions and the necessity, in many cases, of negotiating the substantive changes in the work arrangement which GT cells require. It was apparent that most firms which encountered such difficulties were, however, able to overcome them through (1) contract negotiations and (2) involving those affected by the installation of cellular manufacturing in the planning of this change. In some firms, skepticism on the part of supervisors was a problem and several respondents mentioned that once cells had actually been set up it was difficult to get supervisors, operators and even process planners to follow the “new game plan.” Constant vigilance, disciplinary action, training and information exchange appear to have improved the situation in those firms which experienced such difficulties. Machine utilization was another frequently cited problem area. The most common specific machine utilization problem was the difficulty of load balancing on individual machines within a cell. One firm overcame this obstacle by providing storage space between machines where small quantities of work-in-process inventories could be held. Similarly, it was noted by two respondents that the shop scheduling procedures traditionally employed in a functional layout had proven inappropriate for determining the timing and sequencing of items released to the cells. In both firms programs are currently underway to develop alternate scheduling procedures for items produced in cells. Conflicts also arose over whether or not machines needed in a cell should be included if their highest utilization occurred on non-cell produced parts. One firm papally solved this difficulty by developing alternate routings for non-ceI1 parts which had previously been produced on machines to be included in the cells. A most interesting problem was reported by one executive who noted that: After setting up the cell it was so efficient in producing parts and reducing throughput time that it consumed all assigned work and was standing idle. It thus gave the impression of non-use to the casual observer. A number of other cell problems were cited as well. One firm noted that standard costing was difficult when items made in cells did not require processing on all the machines. Another respondent commented that lack of space in which to relocate machines had initially been a problem. Costs

and Benefits

The twenty respondents to this survey universally indicated that the implementation of GT was a costly unde~a~ng. On the other hand, the pa~icipant firms were equally unanimous in claiming that GT had generated significant savings which geneMy outweighed the costs of their CT programs. The following paragraphs discuss in detail the reported benefits and costs of these U.S. GT applications.

Journal of Operations

Management

195

*p)

using

FIGURE 2

t

‘Matrix

or

Coding

STEP 4 MACHINES ------+R~fB

parts”)

\

Cell

of Part Codes vs. Required by Parts

OL-

“CT Soik!are**

Analysis given the

Requirements”

and

No Formal obvious,

Machine

Matrix Machines

(“Its

of

Classification

In Setting Up a Manufacturing

STEP 3 REVISE PhRTS ---------------;)REVISE

STEP 2 SELECT lM3iINP.S -By TO BE INCLUDED IN THE CELL

/

Steps Involved

PORn CSLL

STEP 5 MACHINES,

SBLECTION~ HACHINES

INITIAL OF

Problems and Solutions Associated

TABLE 9 With Setting Up and Operating Production Cells Solution

Problem A. Labor Related 1. Union resistance to one operator, several

1. Contract negotiations

machines 2. Supervisor unfamiliarity with cell concept

2. Involved supervisors in planning

3. Skepticism of operators

3. Informational meetings

4. Difficulty of maintaining the new manufacturing discipline

4. Training

5. Objections to term “cell”

5. Education

6. Some workers disliked repetitious work characteristic of certain ceils

6. Transfers to tra~tionally organized departments

7. Existing job classification and work rules precluded maximum exploitation of the cell configuration

7. Unsolved

8. Planners try to sneak non-cell items into the cells, since throughput is faster

8. Di~iplina~

action

B. Machine Utilization 1. Load balancing problems (among individual

I. Provided storage between machines

cell machine) 2. Work load fluctuations (cells overloaded at some times, underloaded at others)

2. Try to improve shop loading by use of MRP

3. Traditional commitment to dedicated set-ups

3. Constant follow-ups

4. Conflict resulting when a machine tool is used most effectively on non-cell parts

4. Unsolved for one firm; another rerouted noncell parts

5. Inability of traditional job or flow shop scheduling procedures to prove effective for cell scheduling

5. Use simulation modeling to help develop and evaluate new methods

and shop floor control

C. Miscelluneous

1. Costing is difficult when a cell part does not require all the machines in the cell

I. Unsolved

2. Lack of space in which to relocate machines

2. R~ngement space

of non-cell machines to make

Table 10 provides information on the costs associated with GT installations. The most commonly reported cost was the expense incurred in planning the GT program. Sixty percent of the firms reported that planning for GT was a significant cost: 20% recorded that this was the most expensive item. Other elements which were significant costs for at least 50% of the respondents included purchase of additional computer hardware, purchase

Journal of Operations Management

197

TABLE 10 Costs of GT Programs

Expenditure I. 2. 3. 4. 5. 6. 7. 8. 9. 10. Il.

Planning the GT program Additional computer software Training coders Additional computer hardware Coder salaries Machine tool rearrangement Coding consultants Management education Training cell operators Additional machine tools Consultants (general)

Number of Firms Reporting This Cost as Significant

Number of Firms Reporting This Cost as the “Most Significant” Cost

12 I1 11 10 10 9 9 7 5 2 2

0

of additional computer software and salary outlays for coding items. Coding was also costly in that external consultants were frequently called in to aid in selection and implementation of a coding scheme. Forty-five percent of the firms noted that payments to consultants for coding-related services were a significant, although never the most expensive, component of their GT programs. A costly component of the GT programs at 35% of the firms was management education. Recalling the frequently cited need to educate those associated with GT in order to overcome resistance to change (as was described in the section on GT use), this cost is not surprising. When cells were utilized other costs were incurred: machine tool rearrangement costs were significant for 2 of 11 firms using cells, and 5 of the cell users noted that the training of future cell operators was expensive. In only 2 of the firms using cells, however, did additional machine tools have to be purchased. Table 11 presents data relating to the benefits which accrued to the use of GT. The individual benefits have been grouped into five categories: lead times, product design, inventories, labor and miscellaneous. Significant benefits were realized in all categories. Individually, reductions in throughput time (time from when a part order is released to the shop floor until processing is complete) and total lead time (time elapsing from order to delivery) were the most frequently cited benefits and were each, in addition, among the “most important” benefits for 40% of the respondents. Other frequently cited benefits included easier process planning, improved quality control and reduction in material handling cost. Half the firms reported benefits in each of these areas. Slightly less than half the firms reported that reduced labor costs were a significant benefit and 25% of the firms noted that this had been one of their most significant advantages resulting from the application of GT. Several other benefits are noted in Table 11. The questionnaire also asked the respondents to evaluate their achieved benefits in light of the expected gains from the use of GT. In 50% of the cases respondents indicated that achieved benefits from GT matched expected benefits. 35% of the firms were pleasantly surprised by the fact that achieved benefits exceeded expected benefits. In only 15% of the firms did GT fail to produce the desired benefits. In two of these firms, however, the

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Benefits

Benefit Lead Times Reduced Reduced Reduced Reduced

Number of Firms Noting This Response as “Most Important” Benefit*

work-in process inventories finished goods inventories

Labor Reduced labor costs Increased operator job satisfaction

4

9

2 2 2

8 7 I

3 0

7 4

5 0

9

Miscellaneous Process planning simplified Quality control improved Tooling and fixture expense reduced Material handling cost reduced Space needs reduced Cost estimation more accurate * Frequently,

Number of Firms Reporting This Response as a Significant Benefit

11 13 6 7

total lead times throughput times queuing times setting times

Product Design Design retrieval improved Parts standardization introduced or improved Reduced the number of new parts per year Reduced design effort Inventories Reduced Reduced

TABLE 11 of GT Programs

7

10 10 9 10 7 7

firms noted more than one benefit as most important.

respondents were quick to note that the failure of GT to achieve expected benefits was not “GT’s fault.” One manager commented that “goals have not been achieved due to management’s not committing the proper resources.” Another firm noted that the failure of GT was only in the design area and that significant benefits had been achieved in manufacturing.

CONCLUSIONS The information on the current practices of GT using firms allows some observations to be made concerning criteria for successful applications ofGT among U.S. manufacturers. In particular, the results provide insights into the types of firms which might benefit from applying GT, what kinds of GT applications could be expected, and what is required for successful GT implementation.

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199

The first observation is that GT is a multifaceted tool which can be applied to a wide variety of problems in a wide variety of industrial settings. In terms of industrial settings, GT has been judged as an appropriate strategy by managers of installations each involved in the manufacture of a wide variety of metal items produced in relatively smaI1 lots. While US users of GT have not been identified outside the realm of metalworking, within that industry the type of products to which GT has been applied is quite diverse and suggests the immediate relevance of GT to a broader spectrum of American manufacturers. The survey responses also indicated that CT can be addressed to a wide variety of problems typical of small lot manufactu~ng. Labor difficulties, productivity lags, reductions in quality levels, unnecessary product proliferation and many other inefficiencies have been redressed by GT. Most frequently, however, GT has been implemented in response to a variety of lead time problems (excessive throughput, total lead time, queuing and set-up times, for example). Thus, a batch manufactu~ng installation involved in metalworking production and which is faced with any of the above mentioned problems could benefit from implementing GT. In terms of the appropriateness or desirability of particular types of GT applications (i.e., product design, manufacturing engineering, cellular manufacturing) a few comments are in order. First, GT does not necessarily entail cellular manufactu~ng~ the numerous GT manufacturing engineering applications are, at least for these survey respondents, the most popular uses of GT. (This is interesting since the majority of U.S. publications on GT have focused on the use of GT in product design or on cellular manufacturing.} The wide gamut of possible uses of part families in manufactu~ng engineering may explain why the majority of reported US. users have implemented GT in this area: for example, GT has been shown to assist in manufacturing engineering related tasks for traditional as well as NC machines, a testament to the versatility of using GT principles in this area. A second comment relates to the role of coding in GT applications. While a few respondents were able to use GT in manufactu~ng en~nee~ng and cellular manufactu~ng by relying solely on informal procedures for identifying item similarities, formal coding appears to be an essential prerequisite for the application of GT to the product design area. GT’s ability to organize large quantities of design information is directly linked to the application of formal coding and classification procedures. The use of this coded information in improving the functioning of product design is greatly facilitated by the availability of computerized data storage and retrieval capabilities. In this sense then the future of GT in the area of product design may be influenced by the increased implementation of computer aided design (CAD) programs. As firms begin to rely more heavily on the computer to create and retrieve designs, a m~hanism through which the design process can be systematized and organized will become increasingly important. The use of part families, the central focus of GT, had been found, by many of the firms included here, to be an excellent vehicle for fully exploiting the potential of CAD systems. With regard to cellular manufacturing several comments can be made. First, the expenses incurred when cells are established are significant. Firms included in the survey reported that setting up and operating cells was a costly undertaking. Rearrangement of machine tools required time and money, and disrupted the flow of goods through the facility. In some instances machinery purchases were necessary. In addition to the expense involved in setting up cells, there is also a high degree of uncertainty associated with production

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cells: few individuals have worked with cells, and hence there is little past experience to draw from in planning, establishing and operating cells. In this situation the potential payoff from using cells is difficult to predict with any degree of certainty and such uncertainties are not easily dismissed in difficult economic times. Despite these obstacles, many firms which currently use cells indicated that increasing the number of manufacturing cells was a component of both their short and long run plans involving GT. In these firms, existing cells had generated sufficient benefits to justify the establishment of additional units. Other firms which had applied GT only in product design or manufacturing engineering indicated that they intended to set up cells as well. Thus, firms with any GT experience appear to be one group of manufacturers likely to adopt cellular manufactu~ng in the future. It is aiso probable that the set up of cells in firms not already using GT is most likely to occur (and easier to justify financially) in new plants; here, only arrangement, not rearrangement, is required and there is no established order of the work place to contradict or disrupt. Several respondents to the survey indicated that they felt new plants were the most promising en~ronment for the implementation of cellular manufactu~ng. Regardless of the way in which GT is used, successful application requires two elements: management commitment and GT education for all those who will interact, either directly or indirectly, with the GT program. Respondents to the survey repeatedly stressed the importance of top management commitment. One noted: To make the principles of GT really work in each subdivision of the company, you must have the commitment of each department head. Usually this commitment can only be obtained by top management who should be indoctrinated as soon as possible. The fact that over half of the respondents were vice-presidents or division heads would seem to substantiate the presence of top management in GT programs. The second essential element of a successful program is CT education. The most common obstacle to CT’s implementation in any area was resistance to change. Human inertia and fear of the unknown were cited as the antecedents to this inflexibility. Respondents noted that training, seminars and other education-related activities were successful in removing this barrier to GT, and without such education GT’s use would not have been possible. Informing and involving those who will work with GT in the initial stages of GT’s use will continue to be an essential component of successful GT programs. To the extent that the firms included here are representative of a broader spectrum of US. manufacturers, it is possible to conclude that GT has the potential to make a significant contribution to improving operations for a large strata of U.S. firms. It is clear though that to be successful a GT program requires careful planning, a commitment to promoting GT education, and supportive top management.

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Journal of Operations Management

For Group Technology,” Group Technology: Proceedings ofan International Seminar, Turin, Italy, IntemationaI Center for Advanced Technical and Vocational Training, 1969. 3. Burbidge, J. L., The Introduction of Group Technology, London, Heinemann, 1975.

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4. Burbidge, J. L., “Manual Method of Production Flow Analysis,” The Production Engineer, Vol. 56, 1977, 34-38. 5. Dombush, E. and F. Eiche, “Coding Parts Graphically,” American Machinist, Vol. 113, No. 17, (August 25 1969) 105-107. 6. “Finding the Needle-Key to Group Technology,” Production, Vol. 76, No. 5, (November 1975) 8587. of Classification and 7. Furman, R., “Application Coding By a Large U.S. Machine Tool Group,” Machinery and Production Engineering, Vol. 124, No. 3208, (May 22 1974), 629-630. 8. Gettelman, K., “Organize Production For Parts Not Processes,” Modern Machine Shop, Vol. 44, (November 1971) 51-60. 9. Grayson, T. J., “An International Review of Group Technology,” SME Technical Paper MM71-186, Dearborn, Michigan, Society of Manufacturing Engineers, 197 1. 10. Hallett, W. J., “Classifying 250,000 Drawings By the Brisch System,” Machine Design, Vol. 36, No. 4, (February 13 1964) 141-144. 11. Ham, I. and W. Reed, “First Group Technology Survey Reveals New Manufacturing Game Plan,” Machine and Tool Blue Book, Vol. 72, No. 5, 1977, 100-108. 12. Ham, I. and W. Reed, “Preliminary Survey Results On Group Technology Applications In Metalworking,” CASA-SME Technical Paper-NS77-328, Dearborn, Michigan: Computer and Automated Systems Association of the Society of Manufacturing Engineers, 1977. 13. Hollingum, J., “Machine Tools Shape Up To a Computer Age,” The Engineer, Vol. 244, No. 6303, (January 1977), 20-21. 14. Holtz, R., “CT and CAPP Cut Work-In-Process Time By 80%,” Assembly Engineering, Vol. 2 1, No. 6 (June 1978) 24-27. 15. Huber, R., “Transfer Line Hosts Family of Parts,” Production, Vol. 75, No. 5, (April 1975) 71-72. 16. Hyer, N., Group Technology:Development, Diffusion

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17. Hyer, N. and U. Wemmerlov, “MRP/GT: A Framework For Production Planning and Control of CeIlular Manufacturing,” Decision Sciences, Vol. 13, No. 4, 1982, 681-701. 18. Koenigsberger, F., “The Use of Group Technology in the Industries of Various Countries,” CIRP Annalen, Vol. 2 1, No. 2, 1972, 209-214. 19. Levulis, R., Group Technology-A Review of the State-of-the-Art in the United States, Chicago: K. W. Tunnel], 1978. 20. McLauchlan, G., “Grouping Families of Tools Avoids Duplication-Cuts Design Time,” Machine and Tool Blue Book, Vol. 67, No. 3, (March 1972), 64-69. 2 1. Mahany, H. and J. Tompkins, “CT and MRP: An Unbeatable Combination,” Proceedings: AIIE I977

Systems Engineering Conference, 150- 153. 22. “NC and Part Families Speed Short-Run Production,” Manufacturing Engineering and Management, Vol. 73, No. 3, (September 1974) 27-28. 23. New, C., “MRP and CT: A New Strategy For Component Production,” Production and Inventory Management, Vol. 18, No. 3, 1977, 50-62. 24. Sato, N., J. Ignizio, and I. Ham, “Group Technology and Material Requirements Planning: An Integrated Methodology for Production Control,” CIRP Annalen, Vol. 27, No. 1, 1978, 471-473. 25. Schaffer, G., “CT Expands Capacity,” American Machinist, Vol. 124, No. 1, (January 1980) 130134. 26. Schaffer, G., “CT Via Automated Process Planning,” American Machinist, Vol. 124, No. 5, (May 1980) 119-122. 27. Stauffer, R., “The Rewards of Classification and Coding,” Manufacturing Engineering, Vol. 82, No. 5, (May 1979) 48-52. 28. Suresh, N., “Optimizing Intermittent Production Systems Through Group Technology and MRP,” Production and Inventory Management, Vol. 20, No. 4, 1979, 71-84. 29. Tuttle, H., “Parts Grouping Pays Handsomely,” Production, Vol. 73, No. 6, (May 1974) 99-103. 30. Tuttle, H., “Call It CT or ‘Yankee Savvy,’ Families of Parts Brings Savings,” Production, Vol. 74, No. 5, (November 1974) 88-9 1.

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