By Jean Thilmany, Associate Editor, Mechanical Engineering Magazine

Ask nearly any engineer or manufacturer about customized manufacturing and—to a person—they’ll all say the same thing: Have you heard the Dell story?

Dell is offered up again and again as the number one example of customized manufacturing done right and done successfully. Shortly after its founding in 1984, Dell began what it calls a configure-to-order approach to manufacturing. The computer company lets customers customize their own computers on the Dell Web site. Buyers select how much memory and disk space they desire and the resulting computer is manufactured and shipped to them.

The approach has helped the computer maker see skyrocket growth. Last year, it held the second-highest spot for desktops and laptops shipped, behind Hewlett Packard, according to market-share numbers from research firm International Data Corp. in Framingham, Mass.

Manufacturers—particularly electronics manufacturers—have long been taking notice. Many of them are investigating how the configure-to-order model could be put to use at their own companies. And some of them have implemented the method—along with the necessary software to get the job done—with great success.

Take Hypertherm Inc. of Hanover, N.H., maker of plasma metal cutting equipment. The company has recently started allowing customers to choose online from ten CNC Edge Pro product configurations, up from three configurations in the former product line, said John Sobr, head designer on the project.

Hypertherm recently redesigned its plasma metal cutting equipment to reduce part count by 27 percent while doubling the number of inputs available. Customers can now choose from ten product configurations.

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Axiom 2 – You can’t design out what you can’t see.

In product development, these two axioms can keep you out of trouble. They’re two sides of the same coin, but I’ll describe them one at a time and hope it comes together in the end.

With Axiom 1, how do you make sure you’re working on the most important stuff? We all know it’s function first – no learning there. But, sorry design engineers, it doesn’t end with function. You must also design for lean, for cost, and factory floor space. Great. More things to design for. Didn’t you say time was short? How the hell am I going to design for all that?

Now onto the seeing business of Axiom 2. If we agree that lean, cost, and factory floor space are the right stuff, we must “see it” if we are to design it out. See lean? See cost? See factory floor space? You’re nuts.  How do you expect us to do that?

Pareto to the rescue – use Pareto charts to identify the most important stuff, to prioritize the work. With Pareto, it’s simple: work on the biggest bars at the expense of the smaller ones. But, Paretos of what?

There is no such thing as a clean sheet design – all new product designs have a lineage. A new design is based on an existing design, a baseline design, with improvements made in several areas to realize more features or better function defined by the product specification. The Pareto charts are created from the baseline design to allow you to see the things  to design out (Axiom 2). But what lenses to use to see lean, cost, and factory floor space?

Here are Pareto’s three lenses so see what must be seen:

To lean out lean out your factory, design out the parts. Parts create waste and part count is the surrogate for lean.

To design out cost, measure cost. Cost is the surrogate for cost.

To design out factory floor space, measure assembly time. Since factory floor space scales with assembly time, assembly time is the surrogate for factory floor space.

Now that your design engineers have created the right Pareto charts and can see with the right glasses, they’re ready to focus their efforts on the most important stuff. No boiling the ocean here. For lean, focus on part count of subassembly 1; for cost, focus on the cost of subassemblies 2 and 4; for floor space, focus on assembly time of subassembly 5. Leave the others alone.

Focus is important and difficult, but Pareto can help you see the light.

Measure, measure, measure.  That’s what the black belts say.  However, it’s difficult to do well with product cost since our costing methods are hosed up and our measurement systems are limited. What do I mean? Consider fasteners (e.g., nuts, bolts, screws, and washers), the product’s most basic life form. Because fasteners are not on the BOM, they’re not part of product cost. Here’s the party line: it’s overhead to be shared evenly across all the products in a socialist way.  That’s not a big deal, right?  Wrong.  Although fasteners don’t cost much in ones and twos, they do add up. 300-500 pieces per unit times the number of units per year makes for a lot of unallocated and untracked cost.  However, a more significant issue with those little buggers is they take a lot of time attach to the product.  For example, using standard time data from DFMA software, assembly of a 1/4″ nut with a bolt, locktite, a lockwasher, and cleanup takes 50 seconds.  That’s a lot of time. You should be asking yourself what that translates to in your product. To figure it out, multiply the number nut/bolt/washer groupings by 50 seconds and multiply the result by the number of units per year. Actually, never mind.  You can’t do the calculation because you don’t know the number of nut/bolt/washer combinations that are in your product. You could try to query your BOMs, but the information is likely not there.  Remember, fasteners are overhead and not allocated to product. Have you ever tried to do a cost reduction project on overhead?  It’s impossible.  Because overhead inflicts pain evenly to all, no one is responsible to reduce it.

With fasteners, it’s like death by a thousand cuts.

The time to attach them can be as much as 20-50% of labor. That’s right, up to 50%.  That’s like paying 20-50% of your folks to attach fasteners all day. That should make you sick.  But it’s actually worse than that.  From Line Design 101, the number of assembly stations is proportional to demand times labor time. Since fasteners inflate labor time, they also inflate the number of assembly stations, which, in turn, inflates the factory floor space needed to meet demand. Would you rather design out fasteners or add 15% to your floor space?  I know you can get good deals on factory floor space due to the recession, but I’d still rather design out fasteners.

Even with the amount of assembly labor consumed by fasteners, our thinking and computer systems are blind to them and the associated follow-on costs. And because of our vision problems, the design community cannot be held accountable to design out those costs.  We’ve given them the opportunity to play dumb and say things like, “Those fastener things are free. I’m not going to spend time worrying about that.  It’s not part of the product cost.”  Clearly not an enlightened statement, but it’s difficult to overcome without cost allocation data for the fasteners.

The work-around for our ailing thinking and computer-based cost tracking systems is simple: get the design engineers out to the production floor to build the product.  Have them experience first hand how much waste is in the product.  They’ll come back with a deep-in-the-gut understanding of how things really are. Then, have them use DFMA software to score the existing design, part-by-part, feature-by-feature.  I guarantee everyone will know where the cost is after that. And once they know where the cost is, it will be easy for them to design it out.

I have data to support my assertion that fasteners can make up 20-50% of labor time, but don’t take my word for it. Go out to the factory floor, shut your eyes and listen.  You’ll likely hear the never ending song of the nut runners. With each chirp, another nut is fastened to its bolt and washer, and another small bit of labor and factory floor space is consumed by the lowly fastener.

WAKEFIELD, R.I., and HANOVER, N.H.,USA, June 2, 2008—Hypertherm, the world leader in plasma metal cutting technology, has achieved a 600 percent increase in profit per square foot of factory floor space using Boothroyd Dewhurst, Inc., Design for Manufacture and Assembly (DFMA®) software within a five-year redesign program. Correspondingly, warranty cost per unit has declined more than 75 percent during that same period, from January 2003 to January 2008.

“We started with a vision to make radical improvements in both product performance and product economies,” says Mike Shipulski, Hypertherm’s director of engineering. “Hypertherm met both of these goals by aggressively applying Boothroyd Dewhurst’s software within our existing programs for robust design and lean manufacturing. We found their product simplification software made it easy for us to improve a product’s performance-to-cost ratio. Moreover, we learned that DFMA ideas and financial estimates also lead to profound savings beyond labor and part cost, creating a domino effect ‘downstream’ in operational areas of our organization.”

All technology development, product development, and manufacturing of Hypertherm’s plasmacutting equipment is done in New Hampshire. By simplifying product designs, Hypertherm has decreased labor expenses by 70 percent on redesigned products. That achievement has proven that design simplification is a fundamental and highly effective competitive strategy for negating the effect of cheap foreign labor rates. In fact, Hypertherm actually sells more of its products in regions like Europe, Asia, and South America than in the United States. More of the world’s cutting tables are equipped with a Hypertherm mechanized system than all other plasma brands combined.

Other Hypertherm five-year benchmarks tied to its engineering innovation and management practices include:

Greater private stock value and profit-sharing for all associates

Flat product prices to customers (inflation-based increases only), despite rapidly rising material and outside business expenses

Win-win supplier strategies focused on waste reduction rather than reducing supplier margins

“Hypertherm is an outstanding business model of what can be accomplished by deploying engineering technology as a foundational strategy,” says John Gilligan, president of Boothroyd Dewhurst. “They are integrating their DFMA program with lean concepts, smart use of automation, employee empowerment, and other outstanding approaches. Most unique, from our perspective, is that Hypertherm carefully tracks cause and effect—from the DFMA design station to the shipping dock. They monitor the correlation between part count reduction and business improvement. A 600 percent increase in profit per square foot of factory floor space in five years is a productivity feat of world-class proportions. These results should send a strong signal to other U.S. manufacturing industries about what can be achieved through redesign,” said Gilligan.

Boothroyd Dewhurst has released a DFMA survey-roundtable on the relationship between part count reduction and savings in operational costs that includes measurements and comments from many leading U.S. manufacturers. The report is available at http://www.dfma.com/downstream/ . Nick Dewhurst of Boothroyd Dewhurst, Inc. and Mike Shipulski of Hypertherm will discuss Hypertherm’s DFMA results on June 11 at the annual DFMA Forum in Warwick, RI. For more information on the Forum go to: http://www.dfma.com/forum/index.html

About Hypertherm

Hypertherm (www.hypertherm.com) designs and manufactures the world’s most advanced plasma cutting systems for use in a variety of industries such as shipbuilding, manufacturing, and automotive repair. Its product line includes handheld and mechanized plasma systems and consumables, as well as CNC motion and height controls. Hypertherm systems are trusted for performance and reliability that results in increased productivity and profitability for tens of thousands of businesses. The New Hampshire based company’s reputation for plasma innovation dates back 40 years, to 1968, with Hypertherm’s invention of water injection plasma cutting. The company, consistently named one of the best places to work in America, has nearly 1,000 associates along with operations and partner representation worldwide.

About Boothroyd Dewhurst, Inc.

Boothroyd Dewhurst, Inc. was the first company to commercialize Design for Manufacture and Assembly (DFMA) methodologies and software tools, which make it possible to evaluate, estimate, and reduce the manufacturing cost of a product in the design phase through product simplification and cost estimation. Hundreds of Fortune 1000 companies, including Dell, John Deere, Harley-Davidson, and Whirlpool, use DFMA to cut the costs of their manufactured products and achieve design innovation in their markets. The company was founded in 1983 and received the National Medal of Technology Award in 1991. For more information about DFMA software, workshops, consulting services, and international conferences, contact Boothroyd Dewhurst, Inc., 138 Main Street, Wakefield, R.I. 02879, USA. Tel. (401) 783-5840. Fax (401) 783-6872. Web site: www.dfma.com. E-mail: info@dfma.com.

DFMA is a registered trademark of Boothroyd Dewhurst, Inc.

Design for Manufacture and Assembly Helps OEM Reduce Warranty Costs, Boost Profits — Design2Part Magazine

An expert from the article:

Five-year implementation of DFMA software creates strong business model for improving global competitiveness

“We started with a vision to make radical improvements in both product performance and product economies,” stated Mike Shipulski, Hypertherm’s director of engineering. “Hypertherm met both of these goals by aggressively applying Boothroyd Dewhurst’s software within our existing programs for robust design and lean manufacturing. We found their product simplification software made it easy for us to improve a product’s performance-to-cost ratio. Moreover, we learned that DFMA ideas and financial estimates also lead to profound savings beyond labor and part cost, creating a domino effect ‘downstream’ in operational areas of our organization.”

Hypertherm, Inc. of Hanover, NH, is among the world’s foremost manufacturers of plasma arc cutting equipment. Founded in 1968 with a staff of two, the company today has 750 employees, with subsidiaries, sales offices, and distributors in multiple countries. All technology development, product development, and manufacturing is done in the Hanover area.

View of the new HyPerformance Plasma HPR130 plasma cutter from Hypertherm. The company used Design for Manufacture and Analysis (DFMA) methodology to radically redesign — and improve — the system’s manufacturability. In the new plasma cutter, system subassemblies took 45% to 89% less time to put together. Assembly floor space opened up by 40%. Warranty cost went down 83%. Cost savings amounted to $5 million over 24 months, which helped the company achieve record earnings and its highest profit sharing on record.

Hypertherm’s products range from lightweight, manual plasma cutting equipment to highly mechanized systems that operate with CNC cutting machines. Its advanced technology serves a global customer base in every industry that depends on quality and reliability in high-temperature metal cutting, such as shipbuilding, construction, farm equipment, rail car and truck manufacture, and plant maintenance.

Recently, Hypertherm engineers tackled a project of mammoth proportions when they remodeled the company’s highly successful HD3070 plasma cutting system — and ultimately created the new HyPerformance Plasma HPR130 plasma cutter. Before the redesign project, the HD3070 sold well and was widely regarded as a standard for robust, high-precision cutting in the industry. Hypertherm wanted to make the product even better.

“We started with a vision to make a radical improvement in product performance coupled with a radical reduction in product cost,” says Mike Shipulski, director of engineering for Hypertherm. He believed that using the methodology of Design for Manufacture and Analysis (DFMA) would help identify unnecessary parts, highlight assembly difficulties that hampered throughput, and pinpoint costs that didn’t support performance. “We set explicit cost and performance goals for the redesign project,” he says, “and DFMA analysis helped us achieve them.”

Adventures in assembly

Plasma cutters essentially consist of a power supply unit, a torch assembly, and a gas selection and metering console. When the machine is switched on, current flows from an electrode in the torch assembly to the workpiece. An electric arc is created, which superheats a surrounding stream of cutting gas. The heat turns the gas to plasma. The hot plasma exits the torch through a nozzle and is directed by a second stream of shielding gas to make controlled cuts in steel plate or other metals on the worktable.

The HD3070 redesign project was Hypertherm’s first large-scale venture into DFMA. The first step in redesign was to benchmark a product called the HT2000, which the production team considered the easiest system to assemble. Shipulski assigned mechanical applications designers Brian Currier and Rick Anderson the task of counting all the parts in the HT2000 and sent them out onto the shop floor with pencil and paper. As a guide to the correct analysis methodology, he gave the engineers his well-thumbed copy of the “Boothroyd Dewhurst Design for Assembly” handbook. Their job was to build a production version of the HT2000, their simplest power supply unit, and see how long it took.

“As designers, we had never done such a thing,” says Currier. “The product had 1,000 parts. After spending a week on the floor, building one of these units, we were really motivated to improve the design so it was easier to assemble.”

“They came back with a Pareto chart of part count by type, and roughly two-thirds of the parts were fasteners and connectors,” says Shipulski. “That gave them a real gut feeling about what was driving assembly time and cost for the product. Looking at CAD models and drawings is different than assembling something that’s impossible to put together easily,” he continues. “A hands-on understanding is important. You have your knuckles skinned; you can’t fit the tools in. You sit there, listening to the sound of nut runners securing parts, and you begin to get ideas about redesign.”

The kindest cuts

Currier and Anderson zeroed in on the main cost drivers for the HT2000 plasma system. The power supply unit required assembly from all four sides. It included a lot of extra sheet metal. Each subassembly in the power supply involved too many fastening and connecting operations, as did the separate automatic gas console they benchmarked.

Digital models of two generations of the new power supply unit. DFMA supported a modular design strategy that Hypertherm will follow for more assembly time reductions in the future.

One of the first things we did,” says Anderson, “is we brought in our sheet metal suppliers and asked, how can we do this better? They gave us great ideas about how to incorporate mounting tabs and alignment features into the design.”

Before starting design work for the HPR130 power supply, Hypertherm benchmarked an existing power supply unit using DFMA methodology. This view shows only the left side of the HT2000 benchmark unit. It has 1,000 parts and is assembled from all four sides. Assembly time is 10 hours.

View of Hypertherm’s redesigned HPR130 power supply. It has about 500 parts and is assembled from two sides — in 63% less time. Hypertherm engineers improved assembly efficiency by incorporating mounting tabs and alignment features into the sheet metal structure, by simplifying cable connections, and by replacing dozens of wire connections with new printed circuit board designs.

Hypertherm also challenged its own electronics experts to replace dozens of separate wire connections with new printed circuit board designs. As Currier and Anderson divvied up the subassemblies, a design theme emerged. “For electrical wiring or connecting, we’d try to do them on the board if we could,” says Shipulski. “For gas, pneumatic, or water connections, we’d try to do as few as possible or with as few parts as possible.”

The original pilot arc controller subassembly had 88 parts. Anderson’s economical new version has only 16. Anderson also reworked the AC-to-DC converter (nicknamed the “chopper”), nearly halving assembly time and saving Hypertherm over $200,000 a year

View of the pilot arc controller, which is a subassembly in the power supply unit. The original subassembly (left) had 88 parts. For the redesign (right), Hypertherm engineers cut the number of parts to 16.

View of the AC-to-DC converter, another subassembly in the power supply. The original subassembly (left) had 73 parts. The new design (right) has only 47 parts and can be assembled in about half the time. Redesign of this subassembly alone saved Hypertherm over $200,000 per year.

Currier completely rethought the design of the automatic gas console. The original console had one large, complex manifold that was laboriously assembled on a cart that rolled through the factory. The new console has four small, simplified manifolds, and each can be built on a benchtop. Pre-cut, color-coded tubing with push-to-connect fittings avoids the need for time-consuming sealant. Part count for the console went down by 63% — and assembly time by an amazing 90%.

Hypertherm also redesigned a standalone automatic gas console, which meters and delivers gas for plasma cutting. The original console used as a benchmark for DFMA analysis (center) was a single, large device. In the redesign (left and right), Hypertherm engineers split the console into two smaller units that could be assembled more efficiently.

Close view of the redesigned two-part automatic gas console for the HPR130 plasma cutter. Even with added functionality, part count went down by 63%, and assembly labor time plummeted 90%.

When Currier and Anderson were done, fully half of those 1,000 parts were history. In the new plasma cutter, called the HPR130, system subassemblies took 45% to 89% less time to put together. Assembly floor space opened up by 40%. Warranty cost went down 83%. Cost savings amounted to $5 million over 24 months, which helped the company achieve record earnings and its highest profit sharing on record. A new modular design approach enabled standardization across the entire product family, promising further savings down the road.

“This project showed everyone in our company how improving assembly sequence saves cost and reduces defect opportunities,” says Shipulski. “Hypertherm has a DFMA mindset now. We use more alignment features and fewer fasteners and connectors. We benchmark existing products for part count and assembly time. We score designs using real numbers, so design comparisons are straightforward and credible.”

With the success of its radical redesign project freshly in mind, Hypertherm saw the value of extending the practice of assembly analysis across multiple product lines. To support this initiative, the company purchased DFMA software from Boothroyd Dewhurst, Inc. of Wakefield, RI. The software guides engineers through the steps in analyzing products for assembly simplification and then estimates the cost of manufacturing new designs.

“The results we got from using the handbook showed how an investment in the software would pay off,” Shipulski says. “The basic approach to doing DFMA is the same. The engineers go out and build the existing product. Then they use the software to score the baseline design and review opportunities for reducing assembly time.”

DFMA software gives Hypertherm a standardized reporting format for comparing analyses performed by different engineering teams. It also supports analysis at a high level of detail. “When we first started doing DFMA, we didn’t have the software, so we had a lot of debates about how to score assembly operations,” says Anderson. “The software helps avoid that. Now we can all score the same assembly and come up with similar numbers.”

Currier is presently using DFMA software to guide the redesign of a torch for a brand new plasma cutting system under development. The primary components of the torch are two current-carrying parts, separated by an insulator. The original design included a manufacturing operation that added hours to the build time, so Hypertherm targeted that operation for elimination.

Hypertherm used DFMA software to analyze and simplify the design of a plasma cutting torch. An exploded model of the original torch assembly is shown at top. For the new torch design (below), Hypertherm engineers determined how to configure adjacent copper tubing without requiring Teflon insulating sleeves. They saved additional cost by eliminating a time-consuming potting process. Part count for the torch fell from 58 to 42. Assembly time dropped from 374 minutes to seven minutes.

The original torch design took more than six hours from start to finish. The new design takes less than 10 minutes.

“One of the features I like about the DFMA software is being able to add assembly operations that specify the way we do things,” says Currier. “Our current brazing methods didn’t really match the software, so I just went out with a stopwatch, timed people doing a braze step, and re-created the operation using our data. Now when I need to put a braze joint into a torch analysis, I can just select it and know it’s applied consistently across every design.”