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.

Link to full article

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.

By Mike Shipulski, Director of Engineering, Hypertherm, Inc

Design for Assembly (DFA) methods have been around for over 25 years, but the number of companies using the methods is surprisingly low given that they are straight-forward, fast, and produce significant savings in traditional Value Added (VA) metrics: labor content and material cost. Now that LEAN has raised the world’s awareness of the importance of reducing Non-Value Added (NVA) activities, the true value of DFA methods can be appreciated.

As a first principle, Design for Assembly (DFA) methods focus on part count reduction. Part count reduction results in labor content reduction (fewer parts to assemble) and material cost reduction (fewer parts to buy). Part count reduction and labor reduction on the order of 40% are typical. My personal experience leading design teams is in-line with these numbers and I have achieved a 90% labor reduction on one design project. My personal rule of thumb is to set a goal of 50% reductions in part count and labor when using the methods to redesign a non-DFA design. Leaders of most companies would be thrilled with 50% reductions in VA activities (mine are), but the real savings lie elsewhere.

Counting the Savings

It is difficult to grasp the significance and far-reaching savings that come from reducing part count, but here are some examples to get you thinking. The size of a facility is strongly driven by the number of parts in your product, so reducing part count increases the number of products a facility can handle. Floor space is reduced because there are fewer parts to store and less storage space is needed for internal delivery resources (e.g., hand trucks, fork trucks) because there are fewer parts to move. Utilization of loading docks is reduced because there are fewer trucks to unload. Shipping costs are reduced because there are fewer parts to ship. So, if a 50% reduction in VA labor can’t get your company to reduce part count, you’ll have to retreat to a justification based on slashing floor space and putting more products through your factory.

If the savings are significant and far-reaching, why are so few using DFA methods to reduce part count? Before I get into the reasons, it’s important to understand my background and experience. I lead my company’s product development (Design Engineering) efforts and I have significant experience and education in Manufacturing (I still maintain my CMfgE certification – I’m proud of that). So, I understand what Design Engineering is asked to do and I know what Manufacturing is asked to do. Design Engineering is asked to design products and Manufacturing is asked to do LEAN. So, getting back to the reason why DFA methods aren’t used, the reason is simple: no one asks Design Engineering to reduce part count. And the reason is that company leaders don’t appreciate how significantly the product’s design governs Manufacturing’s LEAN work. To misquote a good friend, as a product designer I can design in more cost in a single afternoon than Manufacturing can take out in a lifetime.

There are few company leaders that have solid, fundamental understanding in both Product Design and Manufacturing, so strengthening the understanding of the design’s influence over Manufacturing’s LEAN work is difficult. The best, and most improbable, way to strengthen the link between a product’s design and LEAN is to ask the VP of Engineering and VP of Manufacturing to swap desks for six months. Getting back to reality, the next best way to get a company to reduce part count is use its fascination with reducing VA activities against itself. Beat the drum for 50% reductions in labor and you get to sneak in the real savings.

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Mike Shipulski is the Director of Engineering at Hypertherm, Inc., a privately-held company that designs and manufactures plasma arc cutting systems. Even though Mike has a Ph.D. in Manufacturing, Hypertherm still lets him design their products.