Monday, November 26, 2007

Kanban in the Kitchen: a Recipe for Supply Chain Education

I saved this article a while back from Hawkeye Planner, but I can't even remember when I first received it. Long story short, it's a great example that everyone can relate to that demonstrates Supply Chain Management in a nutshell.

Kanban in the Kitchen: a Recipe for Supply Chain Education
The supply chain is for smart people. Not too many people understand the basic concepts, let alone the more sophisticated approaches and ideas. Supply chain professionals always try to promote and share what they are doing, but their presentations are usually met with glossy-eyed stares. What we are trying to do is extremely complicated, so unfortunately people just don’t get it. HOGWASH!

The supply chain is one of the most simple, easy-to-explain functions around. The supply chain has one simple goal—to fulfill product and service demand effectively and efficiently. And the activities are not some theoretical construct; the supply chain always ends up with physical products that are bought, made, moved, and stored. Yes, some of the strategies and processes become complicated. Still, they can always be tied back to the real world. For a broad audience to understand (and support) supply chain management, they need a very practical education with tangible example. For that, all you have to do is go to the kitchen.

I tried this education with someone who is probably the furthest away from supply chain management—my mother. My mother has been a homemaker for over 30 years; she is a smart woman who runs the household (and my father) like a business. Would she understand supply chain concepts?

I started with her shopping list. What was she planning on getting from the supermarket? Bread, turkey, cheese, potatoes, chicken breast, one quart milk, Cheerios, asparagus, tomato soup. How did she decide what to get? Well, she was planning on serving leftovers tonight because they would be out all afternoon. Dinner the following evening would be chicken with asparagus and mashed potatoes. Lunch tomorrow would be sandwiches and soup. And of course, father has cereal for breakfast each morning. And why go today? Well, it was going to rain tomorrow, so she didn’t want to drive in wet weather.

“Mom,” I said, “You are a supply chain expert.” She looked at me as if I was ten years old. “Seriously, you are. Let’s look at all of the things that you did. First, you figured what the demand for food would be—that’s forecasting. Fortunately, your customer, Dad and yourself, will consume whatever you make. Then you decided how and when you were going to your meal—that’s production scheduling. You knew that today wouldn’t be a day to cook, but you already planned out tomorrow’s menu.”

“Then, you figured out the ingredients that you needed—that’s material requirements planning. You mentally went through your meal plan and figured out what ingredients went into each. We call that a Bill of Materials explosion. I noticed that you didn’t put mustard or mayonnaise on your list. I am guessing that you already have enough in the refrigerator to last you a while, so no need to buy more. And you are buying tomato soup, although I see that you already have one in the cupboard. I know what you always say; it’s always good to have an extra can for a rainy day. In my world, that’s inventory management with safety stock rules built in.”

My mother thought for a moment, then laughed and messed my hair. “I’m glad that we are both supply chain experts, even if you do need a lot of fancy names for all of the things that I do normally. Will any of these fancy ideas actually help me to do anything better?”

We talked for a few more minutes about where she could improve. I looked through the cupboards and found a lot of extra cans of soup and other goods. I rearranged the cabinets to have a spot for each item and threw out some of the old (obsolete) products. Then we talked about how many cans of tomato soup she needed at any one time. We wrote a card under each can that said “Buy 1 can of tomato soup”. As she used that can, she would pull the card as use it as part of her shopping list.“

I like this little setup, son,” my mother said as she smiled. “What do you call this?”

“It’s called Kanban, Mom. It a Japanese inventory and replenishment technique.”

“Can-Ban: got it, works great for cans. I can’t wait to tell my friends down at the gym about how my son is so smart.” She gave me a big hug.

“I’m sure they will appreciate it,” I replied. “Oh, and Mom, about Sunday dinner this week. You know that I love meatloaf, but maybe Dad would appreciate something different. Maybe we should talk about managing New Product Introductions.”

My mother smiled and shook her head. “That time you almost got me. Your father wants something different than meatloaf? Now you’re dreaming.”

Oh well, I guess that some things don’t change.

Copyright © 2006-2007 Hawkeye Planner LLC. All rights reserved.

Saturday, November 17, 2007

Foreign Flashback:Nissan 180SX Manufacturing in Japan

I thought this video was worth posting because I am having a very difficult time finding automotive manufacturing content from Japanese companies. I know many auto firms cooperate with Japanese companies, but it appears they keep their information out of the public arena. From what I have seen, Europeans seem to be the least concerned with letting insiders into their plants and the Japanese seem the be the most elusive.

This video is completely in Japanese and is well over 10 years old, but it is still interesting to see how the Nissan 180SX (S13 chassis) was manufactured. Production for the car began in 1989 and ended in 1998. If I had to guess, this video is probably from the early 90's. As you watch the video note that virtually everything is performed manually by the production workers including welding and glue application/window placement.

Cutting Edge: Intel's Fab 32 (Arizona)

Intel's Fab 32 is a Cutting Edge $3 Billion Dollar, 300mm Fab with a 45nm process that will go into production in the second half of 2007 (Now!). Intel's Press Release and video tell you almost everything you need to know:

"When completed, Fab 32 will become Intel's sixth 300-mm wafer facility. The structure will be about 1 million square feet with 184,000 square feet of clean room space. The project will create up to 1000 new Intel jobs at the Arizona site over the next several years. During the construction phase, more than 3,000 skilled trades people will be hired to work on the project.

Intel currently operates four 300-mm fabs that provide the equivalent manufacturing capacity of about eight 200-mm factories. Those factories are located in Oregon, Ireland and New Mexico. The company also has an additional 300 mm fab currently under construction in Arizona (Fab 12) scheduled to begin operations later this year, and one expansion in Ireland (Fab 24-2) scheduled to begin operations in the first quarter of next year.

Manufacturing with 300-mm wafers (about 12 inches in diameter) dramatically increases the ability to produce semiconductors at a lower cost compared with more widely used 200-mm (eight-inch) wafers. The total silicon surface area of a 300-mm wafer is 225 percent, or more than twice that of a 200-mm wafer, and the number of printed die (individual computer chips) is increased to 240 percent. The bigger wafers lower the production cost per chip while diminishing overall use of resources. Three-hundred-mm wafer manufacturing will use 40 percent less energy and water per chip than a 200-mm wafer factory."

Thursday, November 15, 2007

Car & Driver: VW's Transparent Factory Tour

The Transparent Factory is so impressive I decided it was worth posting two tours because they contain differing information. This Car & Driver tour includes much more information about the facility including a Q&A with Volkswagen that is very insightful into their thoughts about the VW Phaeton. Enjoy!

Sunday, November 11, 2007

Semiconductor Manufacturing Revisited

Because of the complexity involved in manufacturing semiconductor chips, I thought it would be worth providing some additional reading material in addition to the Applied Materials technical tutorials. Hardware Secrets and Tom's Hardware are both good sites for computer articles, so you may also want to check out their other articles sometime.

I have spent some time inside cleanroom environments, and they are quite an interesting place to be. The machinery is very expensive costing in the millions of dollars for many tools, and the air generally contains less than 10 particles ≥0.5 µm (microns) in diameter (200 times smaller than the size of a human hair). In layman's terms: If you have a job in which you work inside a cleanroom and you go to work and have allergies that morning, you will feel great inside the cleanroom because there are no particles (dust, pollen, etc.) to affect you! The air is kept clean by a huge air handler system that circulates a large volumne of air through HEPA filters that capture any particulate.

The last bit of information worth adding about semiconductor manufacturing is that it is a very complex environment from a production control perspective. Many products in the world are made by batch processes such as paper, chemicals, Coca-Cola, etc. On the other hand many products are made in discrete units with a lot of 1 (Cars are a good example). Semiconductors wafers are generally run together as a lot, but you sometimes split or merge wafers from that original lot and to a secondary lot. Additionally, in some tools you input a lot of wafers (say a quantity of 25), but the tool processes the wafers individually (these tools are fittlingly called single wafer processors). To make things even more difficult there are sometimes batch tools such as diffusion furnances (as shown on the right) where you place multiple lots into the furnace and wait several hours for the processing to finish. In summary, line balancing is very important and can make a large impact on how smoothly the wafers are processed!

So on to the articles:
How Chips are Manufactured brought to you by Hardware Secrets
Semiconductor Production 101brought to you by Tom's Hardware

Friday, November 9, 2007

Direct from Dell.... (Austin, TX)

Dell has a very fascinating history, business model, and supply chain strategy and the company is well known in the computer arena. Dell has had suffered from some issues over the last few years, but overall the company's operations are solid. This Dell Plant Tour Video is a little dated, but it is still very interesting to see the general framework at the Dell factory.

I happen to have studied Dell very closely since about 2001, and I was lucky enough to attend many presentations by Dell employees (and even know several). A few things to note are that as of 2004-2006 Dell operated under the following structure:
  • Laptops are made overseas (generally in Taiwain) by ODMs and air freighted to the US. This likely is due to labor savings and the density to price ratio.
  • Dell's Topfer Manufacturing Center in Austin, TX (TMC is building PN2) assembles Desktop PCs while the building next door (PN1) builds servers.

Additionally, since this video was made many changes have been implemented at TMC:

  • Barcode scanning has been changed to RFID on the totes that move around the factory.
  • Inventory is kept low because Dell does not keep a component inventory warehouse themselves. Their components are kept at consignment warehouses next door where the suppliers own the inventory until it is pulled for a customer order.
  • The Boxing line is still performed manually in some instances, but for certain platforms the High Velocity Kitting line completes the process via automation.

Thursday, November 8, 2007

Facility Showcase: BMW Leipzig

BMW has a short yet detailed video on their facility in Leipzig, Germany. It discusses the thought process that went into deciding facility attributes, and also provides some insight into BMW as a whole. The robotics in the body shop, paint shop, welding, etc. are amazing to watch, and the facility layout is also quite impressive. From what I can tell there are few if any paper travelers at Leipzig, and the operation itself appears world class.

Wednesday, November 7, 2007

Maserati: Italian Luxury

Maserati has an interesting history with ownership changing many times over the years. Within approximately the last decade, Maserati has gone from Fiat ownership, to join Fiat/Ferrari ownership, to full Ferrari ownership, back to full Fiat ownership (which is even more interesting since Fiat owns Ferrari). Over this period Ferrari helped reinvigorate Maserati and even developed the engine and drivetrain which is shared amongst the different models.

Maserati's plant tour shows some great examples of component commonality because their lineup appears to have many common parts with different exterior styling to address very specific customer segments.

  • Quattroporte - Four Door sedan (Quattroporte means four doors in Italian)
  • GranTurismo - Hard Top Coupe (2+2)
  • GranSport - Hard Top Coupe (2+2)
  • Gransport Spyder - Two Seat Convertible; No back seat
  • Coupe - Hardtop Coupe (2+2)

In fact, per the video the only difference between the the Quattroporte and Granturismo is that the Quattroporte has a larger grille. Maserati only manufactures ~7,000-10,000 vehicles per year, but would like to increase that number as sales in North America increase.

Some interesting points from the Maserati Plant Tour video that I noted as I watched it were that:
  • Maserati has implemented a JIT methodology, and looked to have much of their information on the Paper travelers that move with each car.
  • Around the 3 minute mark the spokeswoman notes that the vehicle being shown is definitively an american car because of the cup holders!
  • Engines are tested as modules by Ferrari and also Final Tested in a finished car up to 250 kpm. Each car is then driven 80km over city streets, mountain roads, and highways.
  • If you pick up your car at the Maserati showroom you will find your car covered with a blue cover so you can unveil your car, open your champagne, and party with Maserati! You also get your own photographer so you can be assurred the event is documented. Note: Sounds very similiar to Ferrari to me!

Tuesday, October 30, 2007

Car & Driver: Aston Martin Gaydon Plant Tour

Aston Martin...... The brand often evokes thoughts of racing or, due to clever marketing, a connection to Bond.... James Bond. Whatever you think about the brand, you have to admit the cars are very stylish and nice all around (and they had better be with MSRPs from $113K-$255K!).

This Car & Driver Plant Tour shows you around the Aston Martin Plant at Gaydon, Warwickshire, England. There are 45 pictures with captions, so there is quite a bit to see regarding how Aston Martin's are manufactured. As always, there isn't too much direct information about the company's operations, but a good deal can be inferred about company methodologies by the facilities, personnel, and equipment. I couldn't find exact annual figures for Aston Martin production, but the volume is relatively low (somewhere between 1,000-2,000 vehicles per year). This is reinforced by the low automation in the factory, which also fits the "handmade, high quality" persona associated with the brand.

Once you know, You Newegg! (Warehousing)

Being a computer hardware enthusiast I have been a longtime supporter of Newegg for their great selection and fantastic service levels for all things technology. Additionally, you don't see too many companies opening their doors for warehouse tours, and from both my experience as a customer and the Newegg Warehouse Tour reported by Anandtech the organization looks as solid as my service has been consistent.

Newegg is focused on high customer service levels, and it can be seen by their quick warehouse picking, operational flexibility, and many shipping methods. I truly appreciate the newegg option to make the order a Rush order by paying a few additional dollars .... Many retailers only give buyers the option to shorten their order leadtime by changing shipping methods, which gets expensive very quickly when you go from ground shipping to airfreight (usually at least 2x the cost).

The other problematic issue with shipping being the only user controlled variable is that I have purchased items (from other vendors) in the past that I upgraded to Fedex 2day shipping only to have the order take so long to pick that the order pushed out beyond the weekend anyway! I really wanted my order before the weekend for a computer build, so if I had known that the order would take forever to pick, stage, and package then I would have just saved the money and waited the additional week. Therefore, I find the Rush order option to be perfect for many people who need additional expediting control; it also allows Newegg to offer a service level somewhere between the cost of ground and 2nd day Air. This pricing point is a price many people are more than willing to pay, and Newegg earns the additional money rather than passing it on to the shippers!

Newegg's operations look very consistent with other warehouses I have visited (random item locations powered by a picking system, pick to light (PTL) conveyors with totes, manual and automatic boxing, etc.), but if you spent time really looking at the detailed processes I bet you might find a few innovative things that give Newegg a competitive advantage. The reason I believe this to be the case is that Newegg runs a very powerful, organized website and many of their products are high value, yet are also low weight. Newegg runs warehouses in CA and TN, so that gives them good access to both the east coast and west coast markets with adequate service to the middle of the country. The article mentions Newegg's target delivery goal twice, and I think it is an admirable one.
"Newegg's goal is to be able to have your shipment to you within 2 days of ordering it regardless of shipping method. It's not a guarantee, but rather an internal goal that they've been striving for ever since their inception. "

"We put great effort into building a bulletproof infrastructure because we are committed to ensuring our customers have the best service. Sure, you can find smaller companies that may be a dollar or so cheaper, but at Newegg we decided we wanted to give our customer the best experience every time, and that is why we must invest into advanced systems that other companies do not have. We built all this with the customer specifically in mind."

-Howard Tong, former Newegg VP

Friday, October 26, 2007

Television: Reality is In....

With all of the everyday-life television programming out there and many networks becoming niche markets for things (Food, News, Sports, Education [TLC, Discovery, History Channel, etc.]) it should come as no surprise that there is even a market for plant tours and manufacturing, especially when it allows manufacturers to enhance their presence in the marketplace and show off their latest and greatest products. Not all of the shows are of the same caliber, but there are several TV shows that I have found to be both entertaining and educational (my wife even likes a few!).

I record several shows because you never know what tidbit you will learn (even if the plant tour/subject has already been covered). And since it is recorded I can always fast forward or stop watching if the content isn't up to par. So, here is a list that may be worth investigating further if you are looking for more media to view. Many shows will provide company/product history in addition to showing you how things are made.

If you search YouTube and elsewhere some of the shows are even available.

How Its Made - Paintballs

How Its Made (US, Canada I actually prefer the Canadian version...) - Plant Tours for many products - Discovery & Science Channel
Modern Marvels - A Broad Range of Topics - History Channel
Unwrapped - Food Product Plant Tours - Food Network
History's Business - Interviews with company CEOs - History Channel
Made in America - American Plant Tours - Travel Channel

Fifth Gear - Automotive reviews and information - Formerly on Speed; This is a British show
Top Gear - Automotive reviews and information - Formerly on Discovery; This is a British show

Mail Call - Military history with some discussion of development/manufacturing - History Channel
Modern Marvels - A Broad Range of Topics - History Channel
Shooting USA - Coverage of the shooting sports with Plant Tours and other good technical information - Outdoor Channel
Shooting Gallery - Information about the firearms industry, related products and services. There have been several good Plant Tours on this show as well.
Sighting In with Shooting USA - I think this one got cancelled, but it was also good. - Outdoor Channel

How Stuff Works
How Products are Made

Thursday, October 25, 2007

Technical Tutorials: How to Make a Chip & Flat Panel Display

This isn't exactly a plant tour, but these Technical Tutorials made by Applied Materials have some good information on how semiconductors are made. Some of the presentations are a little long, but you'll learn more than you ever wanted to know about the steps required to manufacture a chip. The two directly linked tutorials are How to Make a Chip and How to Make a Flat Panel Display respectively. Other presentations available at the Applied Materials How We Do It page include:
What is Nanomanufacturing Technology
What is Solar Electric Power,
How to Make a Transistor,
How Clean is Clean,
Build a Transistor Challenge ,
How to Make a Chip,
How to Make a Flat Panel Display

Canon Lens Plant Tour

I don't know as much about it, but optics are also an area I find very interesting. I took Engineering Physics in college and have since forgotten much of it, but I have a great appreciation for the engineering that goes into anything dealing with light and also sound. While looking for lens information I found someone who stated that he "believes Canon is the only camera company that manufactures all their own lens elements from raw materials (at their Utsunomiya plant). Leica makes lenses too, but they also OEM out some of their lenses entirely."

This Canon plant tour shows all of the steps to create a camera lens from start to finish, and the featured product the EF 500mm F4L IS USM is a gigantic lens at 19.7 inches in length! Also be sure to check out the Lens Gallery at the bottom which has more information about lens materials and physics.

Flashback: 1954 Smith & Wesson Plant Tour

Raw Steel to Smith & Wesson - The Story of Revolver Making
Thanks to a forum member over at the Smith & Wesson Forums, here is a vintage plant tour of the Smith & Wesson plant circa 1954. The manufacturing operation is nearly entirely vertically integrated as can be seen by the raw steel and raw walnut blank inventory for grips; in fact the only "outsourced components" I can think of at the moment may be the wax paper and paper shipping box! The article claims there are over 2000 operations and 500 inspections, and I believe the claim since virtually everything for the revolver was made onsite. Additionally, since this tour is so old every operation was pretty much a manual job. The craftsmanship of the operators was essential to making a quality product, and the hand fitting required made the task closer to an art rather than just assembly.

Some of the interesting highlights of the tour are as follows:
Image 5: The in-house Screw machine department
Image 29: Father and son Blaisdell team; You sure don't see anything even close to this anymore!
*Father's age: 75 with 52 years of S&W service
*Son's age: 41 with 16 years of S&W service
Images 36 & 42: Hand serialized parts (and assembly numbers for internal tracking)
Images 49 & 50: S&W makes its own tools/jigs/fixtures/gauges
Image 59: Manual recording of revolver shipments. To this day you can still request a factory letter for $30 from S&W Historian Roy Jinks that will tell you your revolver's original configuration, date of shipment, and where the gun was shipped to.

I thoroughly enjoyed this Flashback tour, and I hope you do as well. Things have changed considerably over the last 53 years, and it is always interesting to look back to see how a pre-computer, pre-CNC maching, etc. factory operated.

If you have any magazines, links, etc. to other old plant tours I would love to share the information with everyone! Now, on to the S&W tour....

Wednesday, October 24, 2007

Bentley Motor Cars Crewe Plant Tour

So to change things up here's some more Automotive goodness from Car & Driver magazine. An interesting tidbit is that since 1998 Bentley has been owned by the Volkswagen Group. I don't think I would personally spend 6 figures ($170K-$320K) for a new Flying B, but this tour will give you an idea of what you are getting for your hard earned cash. The production volumes are low for a production car, and the lack of automation (read: hand made car) suits the quality/customization/craftsmanship criteria toward which the vehicle is targeted. Enjoy!

Tuesday, October 23, 2007

SMT Machines Amaze me...

With coverage on the two Plant tours below (Kingmax and Gigabyte) I thought it was worth sharing more information on Surface-mount technology (SMT) machinery such as the Fuji machine pictured to the right. For high volume products with many components (chips, capacitors, resistors, etc.) SMTs are generally a sound investment, as can be seen by their speed (0.068 Seconds per Component aka 40,000 cph) and precision (Placing Accuracy:+/- 0.0039 in. aka +/-0.1mm). As if the speed and precision weren't enough, surface mount components (SMCs) are generally smaller than their leaded counterparts, so the overall PCB and therefore the entire electronic device can be made smaller.

In order to utilize Surface mount technology, surface mount components must be purchased. An SMT component is usually smaller than its leaded counterpart because it has no leads or smaller leads. It may have short pins or leads of various styles, flat contacts, a matrix of balls (BGAs), or terminations on the body of the component (passives). The part shown in the picture on the left has 112 pins on it. To do this as a standard DIP, the part would be nearly 7 inches in length! That is just too big. With SMT, this part is a little under 1 square inch.

So on to the videos..... I have never seen a SMT machine operate in person, but I would equate the fastest machines of the bunch as essentially being component gatling guns!

Gigabyte Mainboard Factory

Fuji pick and place

Kingmax Plant Tour

Today's Plant Tour is the of the Kingmax Memory packaging and memory module factory in Hsin Chu, Taiwan. Kingmax performs their own chip packaging, which you do not see quite as often, and also assembles finished memory modules. As far as I could ascertain, Micron used to be a large supplier of Kingmax's chips, but now it could be any of the memory manufacturers; Micron, Promos, Samsung, etc.

Gigabyte Plant Tour

Today's Plant tour is of the Gigabyte Nan-Ping Factory in Taiwan. To provide some background, GIGABYTE, which was founded in 1986, has become one of the world's largest motherboard manufacturers. In addition to motherboards, GIGABYTE has further expanded its product portfolio to include graphics cards, notebook and desktop PCs, digital home entertainment appliances, networking servers, and other electronic products.

Gigabyte allowed several sites to provide plant tour coverage, so there is both a short, 2 minute video made by Firing Squad (2006), and detailed virtual tour with commentary from PCStats (2005). The factory assembles both motherboards and graphics cards, and is a great primer for those who have never looked at the detailed steps involved in making today's latest electronics. Many people do not realize that the whole process of manufacturing PCBs and similiar devices is very manual labor intesive, and therefore is almost always performed offshore from the US.

"Without a doubt, motherboards are the most complex and essential part of the
modern PC. Not only do they hold the chipsets that pass data from peripherals,
drives and memory to the processor, they also provide slots and ports for all
your other system components and the circuits through which all data must pass.
Perhaps surprisingly then, motherboards get very little respect in the computing
press as compared to other components. They are perpetually the team player and
not the star of the show, and are generally priced as such.

With this in mind, it's surprising to learn the amount of work and machinery involved in manufacturing a single motherboard. We'd vaguely imagined some sort of stamping process where all components are slapped onto the bare board in one step and soldered, before being boxed in a big room full of bored workers. Sure there'd
have to be some testing, but how intense could it be?"

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Sunday, October 21, 2007

Greatly Exaggerated (The Demise of American Manufacturing)

This article hit my inbox and was something that I had already mentally considered since I work with manufacturing operations, but I had not pondered it in as great of a depth as the article delves into. I think Terry is on to something; manufacturing is definitely not a dead end industry, but you rarely hear positive things about it either. If this trend isn't changed many of the best and brightest will all gravitate to the other "Best Careers" i.e. Consultant, Nurse, Physician Assitant, Engineer, Systems Analyst, Actuary, etc.

Greatly Exaggerated

By Terry Finefrock, CPIM

Many years ago, when I had yet to make a definitive choice regarding my career, I received the following counsel: Avoid the “smokestack” manufacturing sector. Trusted mentors advised that manufacturing faced an uncertain future and might well succumb to the Darwinian natural selection process of global competition and go the way of the dinosaurs.

After working more than 30 years in manufacturing, and in the supporting software and performance consulting sectors, I am pleased to announce that the rumors regarding its likely demise were greatly exaggerated. According to recent articles in news outlets such as The Associated Press, The Washington Post, and WorldNews, U.S. manufacturing is adapting quite well to the challenges of managing a successful enterprise in today’s dynamic global environment.

Press coverage also mentions, however, that manufacturing employment is shrinking. This may lead some to believe that manufacturing is declining and, consequently, cause people considering a career in manufacturing to reconsider. Let’s separate fact from fiction by looking statistics regarding manufacturing in the U.S. and explore the myth that manufacturing, as an industry, is declining.

The U.S. “leads the world in labor productivity,” according to a United Nations (U.N.) report released earlier this month. The report states that the U.S. “beats all 27 nations in the European Union, Japan, and Switzerland in the amount of wealth created per hour of work.” American workers work more hours and produce more product (wealth) per hour than their counterparts in Europe and almost all other rich nations.

The U.N. report links increased productivity in the U.S. with factors that include the revolution in information and communications technology, how we organize companies, the high level of competition within the United States, and the extension of trade abroad. The U.N. report also notes the huge gap in productivity and resulting wealth (standard of living) between rich and developing nations.

Shrinking employment
The Washington Post article, “Biotech spurs U.S. manufacturing,” by Peter S. Goodman, describes the exodus of 400 low-tech, labor-intensive, hosiery manufacturing jobs to a developing nation and their replacement with 80 jobs provided by a biotech start-up venture in the same town and building. The article notes that even the new factory’s lowest-paid technician takes home a paycheck far larger than those received by previous workers. Although legislation is being considered to soften the perceived negative impact of factory closures, the article concludes that American manufacturing is, in many ways, stronger than ever.

The value of American manufacturing increased from $1.3 trillion, in 1977, to an all-time record of $3.5 trillion, in 2005. Although American manufacturing represents only 5 percent of world manufacturing activity, it produces almost 25 percent of globally manufactured product. The Washington Post article recognizes the impact of productivity, a reduction in manufacturing workers from 19 million in 1979 to 14 million, and the need for workers to acquire the new skills and training required to support the remaining higher technology jobs. Economists suggest that U.S. manufacturers, to be successful, should target high-value products that use America’s technological advantages to offset the higher labor costs.

Change and information
The only constants in my life have been change and competition. They make “situational awareness”—the ability to recognize changing circumstances and adapt quickly or become extinct—very valuable. The rate of change—driven by factors such as global interactions, exchange of ideas, the Internet, travel, and the consequent development of new information—continues to accelerate. Information purportedly doubles every four years, with digital information doubling every 60 minutes.

Developing countries need self-sustaining work. They have lower standards of living and, therefore, lower labor rates than the U.S. It’s not all bad that American companies that cannot automate and reduce “touch” labor export those jobs to developing countries. This exporting of labor enables developing countries to improve their standard of living, become self-sustaining, and potentially reduce the amount of aid required from wealthier nations. Rather than resisting and obstructing natural economics with tariffs and legislation, we might better focus on the adaptability and retraining of our existing workforce.

Education and training
I was recently disappointed to learn that a local university offers only one elective course in manufacturing, called Supply Chain Management. This university enrolls 30,000 students, and its business school boasts a national ranking. I was advised that the minimal manufacturing-related course offerings are a direct response to the dwindling number of students interested in pursuing a career in manufacturing. I believe this illustrates the significant challenge facing manufacturing and APICS professionals today. We must develop our future leaders to sustain the vitality of our manufacturing sector.

APICS involvement
APICS is dedicated to developing and providing information, education, innovation, advanced practices, and concepts to improve performance. APICS has developed standard terminology, a cadre of professionals, a centralized source of knowledge, and practices and tools such as enterprise resources planning and business intelligence to identify and implement opportunities to improve and sustain our productivity. Our practices and tools enable the global expansion, organization, and integration of the actions of the customers and suppliers that make up our global businesses and supply chains. Our value—the ability to educate and train others in the use of these tools and practices—has never been greater.

A company for which I once worked had a slogan that I think is germane to these issues and one with which APICS is very much aligned: “People are our most important products.” Let’s collaborate and produce terrific “products.”

Terry Finefrock, CPIM, may be contacted at
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Volkswagen: The Transparent Factory (Dresden, Germany)

To lead off the Plant Tours I'll start with the tour that most exceeded my expectations. Volkswagen's Transparent Factory (GLÄSERNE MANUFAKTUR auf Deutsch), as highlighted in a Plant Tour on the VWvortex forums, is a phenomenal manufacturing facility. In my opinion it is one of the most impressive factories I have seen to date. The Transparent Factory opened in 2002, and both the German and English names are a word play on the double meaning of transparent, referring to both optical transparency and transparency of the production process.

The Transparent Factory builds VW's top of the line Phaeton, and Bentleys can also be built on the same assembly line since the Phaeton's D1 platform is shared with the Bentley Continental GT and Bentley Continental Flying Spur. Ergonomics and a great deal of industrial engineering are obvious in the layout and manufacturing design. The assembly line is quite different from any automotive final assembly plant that I have seen before, and the whole facility has an experimental design feel to it. The cleanliness of the facility lends a sterile, hospital like feel to the whole site, and the white coveralls of the assembelers almost seem inappropriate (as if they should be wearing a white lab coat instead)!

The assembly operation and component factories, in places such as nearby Zwickau, appear quite integrated, and one can definitely tell that little expense was spared to establish the Transparent Factory as the flagship manufacturing operation in VW's worldwide operations. I am still very surprised that VW has not advertised their Phaeton manufacturing process more to the public. Phaetons are very nice cars, and showing the public how their car is built would make many people rethink the general assumption that VWs are a lower tier product versus Audi, BMW, and Mercedes Benz.
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Saturday, October 20, 2007

Why Manufacturing Excellence?

I chose Manufacturing Excellence as the name for my Blog because it seemed the most appropriate for the Supply Chain Management, Design, Engineering, Operations Management, Production Control, and Planning topics in which I am particularly interested. Supply Chain and Operations topics touch our daily lives in so many ways, but unfortunately many people are not interested in them because they often seem to be mundane, unglamorous roles in business. I hope to change that mentality, or at the very least show people that there are interesting things going on around them everyday that they may be totally unaware of.

As businesses evolve and global markets allow new models to develop, manufacturing would appear to be a dinosaur of industry. Why would you even want to build or assemble something in a country with expensive labor when you could build the same thing in country X, Y, or Z (Japan back in the mid part of the century, later Taiwan & Korea, currently China). The aforementioned question is fine for a commodity product and sometimes other items, but especially with the industries I am most interested in (Automotive, High Tech, & Military) the low cost unit price does not always mean the lowest cost to the company overall. This may seem counterintuitive, but there are many costs involved in legal/intellectual property issues, cultural issues, transportation and logistics, quality, etc. Therefore, especially in industries with short product lifecycles and complex products, you will often find companies attempting to enable their supply chains and gain a competitive advantage in responsiveness (time) and/or quality.

In summary, I am hoping to make Manufacturing Excellence an amalgam of news, ideas, and anything that is both educational and entertaining! Manufacturing and plant tours are simply one of the best ways to learn while being entertained, and the visuals often add elements to the experience that words alone cannot convey. Learning as much as you can and then applying the knowledge at your own workplace will allow you to contribute to your own company's Manufacturing Excellence!

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Thoughts On Blogging...

I will preface my first post with my intentions and criteria for starting to blog in the first place. I actually do not read many blogs, but for those that I do I have the utmost respect. Posting useful information is one thing; creating intriguing content on a regular basis is quite another. I intend to start with the prior and work my way up to the latter, but I am always open to feedback and suggestions from users.

I wrote down some framework for this blog, but another very educated blogger wrote words more eloquently than I, so here are several thoughts I wholeheartedly agree with (with a few edits):

"I like to read blog articles that are short, sweet, and to the point.
If I wanted to read a manifesto on a subject, I would buy the book, and curl up
under a quilt in bed, not sit at a computer desk. I'm not reading for study, but
rather for entertainment here. Frequently interruptions occur while sitting at
my desk, so the attention span I can give is by it's very nature......short.

I'm attracted by visual imagery. I like pictures, but I want to
read a bit too. I want the content to be of substance, not simply narcissistic
ramblings. I want pages to load fast, not be filled with a bunch of personal ads
and other nonsense. I like to know what I'm going to get when I go to a blog. I
like the blog to have a theme, and pretty much stick to it. If it doesn't,
labels or other categorizing links are much appreciated. I've been told that a
blog is a public journal. I suppose that is true.

Therefore, I consider Manufacturing Excellence's content to be mainly Plant Tours, Operations Information, some general business news/information, and perhaps 10% other curious stuff that intrigues me. Because of my personal interests and background there will likely be a slant towards Cars (Automotive), High Tech (Computers & Semiconductors), and Military (Firearms & Weapons Systems), but frankly I find consumer products and just about everything else interesting as well!

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Friday, October 19, 2007

A quick About Me...

Supply Chain Management and engineering has always appealed to me, although I probably would not have classified it as such early on. My choice reading in the 6th grade was generally military related: Airplanes (WWII to present day), submarines, ships (Robert D Ballard had a great book on the Bismarck!), and even my lifetime game choices were SCM/strategy related: Stratego, Risk, Axis v. Allies, Warcraft, Starcraft, Company of Heroes. Over the years my interests have sometimes changed, but overall as I grew up my reading topics transitioned from military to computers in approximately junior high school, cars were added once I turned 16, firearms once I passed 21, and manufacturing interests really took hold over that entire duration. As I read about all of my interests (cars, computers, firearms) I learned more and more about how they were designed, manufactured, marketed, distributed, etc.

While volunteering in high school for Race for the Cure, I was working with other students to put together the gift bags for race participants. The setup was a simple production line with an empty bag starting at the front of the line with students adding items as the bags moved towards the end of the line where I was stationed. I specifically remember directing others around me to help align our activities with the speed of the line. By the end of the day, my boxing team was always running approximately the correct speed, and I would reallocate some of the members to other areas to help alleviate some of the bottlenecks (as best I could gauge them). Maybe my experience is idealized in my own mind, but nevertheless it made me rethink "manufacturing" in a whole new way. If managing a picking line was that much fun, real manufacturing would be a blast! And so it was...

Upon graduating high school, I attended The University of Texas at Austin where I earned a degree in Supply Chain Management with supporting classes in Electrical Engineering. Overall, this major fit me perfectly because I wanted to work in the business world and work with technology as well.

My experience includes the following:
*Inventory Associate at Carmax during High School (Automotive)
*Inventory Control/Accounting/Shipping Manager for the online store during College
*Production Control Planner at Applied Materials (Semiconductor)
*APICS Certified in Production and Inventory Management (CPIM)
*Production Planning Analyst at Maxim Integrated Products (Semiconductor)
*APICS Certified Supply Chain Professional (CSCP)

I love supply chain management, but manufacturing holds a special place for me because when working with manufacturing, things are tangible in a way unlike most other company roles. When suggestions are implemented, one can often directly see the results, and being in the middle of the chain allows you to see your impact on your own company and suppliers/customers (and also their impact on you).
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