WCM – combines engineering and manufacturing to produce automotive solutions for

leading global brands.

1. Faster, Higher, Stronger

Excitement in industry was confined to high-tech R&D. Manufacturing was stagnant.

How quickly things change. While the changes have scarcely touched sma ll companies, the well-known
manufacturers a re caught up in revival, renewal. recove ry, and renaissa nce. A popular term among those caught up is
~'OTld-class manufacturing or a tcnn like it. World-class manufacturing may sound like Madison A venue hyperbole, but
it is not.

The Goal and the Path

he concluded that Ihe whole Ihing was like the motto of the Olympic Games: drius, alrius, /orlius. From Ihe Lalin
the English translation is "faster, higher, and stronger." The WCM equivalent is continual and rapid improvement.

Beyond the Basics

Numbers do serve Ihe world-class manufacturer- when they show how good the product and service are, how
much improvement is occurring, what problems to attack ne}lt, and what the likely causes are. WCM mandates
simplification and direct action: Do it, judge it, measure it. diagnose it, fix it. manage it on the factory 11 00r. Don't wait
to find out about it by reading a report later

Turning Point
There is reseeding going on, and there seems to be a single yea r that could be called the turning point: the year
1980. In thai year a few North American companies (and perhaps some in Europe) began ove r· hauling their
manufacturing apparatus. Those first WCM thrusts followed two para llel paths. One was the quality path, and the other
was the just-in-time (JIT) production path.

Those st irrings in a few companies in 1980 may someda), be chro niclt .. d as the th ird major event in the histo
ry or manuracturing management. The first two: (I) coordinating th e racto ry through use o r stan - dard methods and
times, Frederick W. Ta),lor, Fra nk Gi lbreth, el al. , circa 1900; and (2) showing that motivation comes in no sma ll me:lsu
re rrom recognition, the Hawt horne Studies al Weste rn Electric, circa 1930.the 3rd one is wcm

Tile j- 10-20s
My 5· 10-20 list docs not do justice to WCM developments o utside or North America, nor is it at all complete ror
No rth America . I huve conduc ted seminars and provided consultancy al manurucluring planls in a number of European
and Pacific Basi n (bt."Sides Japan) coulltries and ha ve found Ihc WC M rever to be globe-spanning.

WCM has nOI had a c hance to malure , . r "'U lrr, Hlghrr, Sirongrr in all or ils nat ural habitats. What surprises man)'
is Ihe progressive unearthing or mo re and mo re na tural habitats. I rerer not to different continents and countries but
to different industries and t)'pes o r production. That is. what makes a world-class manufacturer in one industr), a lso
seems to work in mall)' ol her industries. Let us see why that should not be surprising.

If a restaurant kitchen grew the wa)' o ur ractories do, the planer would go to the grill area ror a piece or meat and
then move b)' slow conveyor to the vegetable area. The mea t would get cold-and might evc=n rail 10 the Hoor once or
twice on the wa)'. AI the vegetable area, the massive cookers might be tied up making vegetables other than the kind
ordered for the platler, which means wailing unlil the next batch is cooked.

GrowTh is nOI the problem. The problem is the more-or-the-same approach to growth. A restaurant is a litllejob
shop, 10 use the man uract uring term. It will not wo rk if it becomes a big job shop-where a job (platter) has to traverse
vast distances from one shop to another, waiting for o ne th ing o r anolher at mOSI o r the shops. Growth must Be
accompanied by a transformation preserve speed, to avoid MOpand-go production.

JOB SHOP – MADAMING VARIETY MAGULO UNG PROCESS FLOW CHART

FLOW SHOP – STRAIGHT LANG ISANG PRODUCT

Job shop people looked enviously al the f10w shops. where wo rk just f1 0ws down a production line or through
pipes continuously

ThaI view is out of style. because we have learned how to streamline our job shOps. to make them behave more like
f10w shops. Some go so far as to simplify products and regula rize schedules, and thereby transform themselves in to
flow shops. Many others- those that stick wit h customers who demand variety- will not become flow shops, but I hey
can come close. The chameleon cannot ever be a leaf, but II can look like one. So it is in manufacturing.

Imperfect Flows
Jn rEA lity the flows are usually not all that cOn ti!lUOuS. The gram nulls, the food processors. the medicine makers,
the cloth producers, and Ih e rest are stop-and-go producers, too. They go for a time on one sizc, style, model, or
chemical formulll iion, then shut down for a complete changeover in order to run another. Shut downs ror changeover
are one concern. The massive quantities that build BETWEENl changes- the raw and semiprocessed material, and
especially the fin - Ished goods pushed oul well in advance of customer needs- are a greater concern. All are forms of
costl y waste. There arc dominant WCM precepts for treating the ailment. One is a JlT principle- The smaller the lot
size, the BETTER

Jit- is an inventory strategy companies employ to increase efficiency and decrese waste by
receiving goods only as they needed in th lproduction process, thereby reducing inventory
costs. This method requires producers to forecast demand accurately
A second precept is the total quality control (TQc) principle:- Do it right the first lime. In the flow industries this
means setting up for a new ru n so that the first yard of cloth, linear foot of sheet steel, length of hose, can, bolt Ie. or
tablet is good.

A third set of precepts is called "total" prevcntive ma in tenance (TPM).- Maintain the equipment so often and so
thoroughly that it hardly ever breaks down, jams, or misperforms during a production run. There is nothing like an
equipment failu re to turn a continuous processor in to its opposite number.

Mass Production-Just in Time

Henry Ford, because his plants followed his now famous dictum, "They can have it any color they want, so long as
it's black."

BLACK COLOR LANG UNG PRINODUCED NILA UNG MODEL T PARA MAGING PRODUCTION LINE UNG PROCESS NG
PAGMAMANUFACTURE NG KOTSE PARA MABILIS AT MARAMI.
 Mak ing Just What Is Sold- Every Day
Just in time

If a "''Orld·class manufacturing tifort fails to mokt it Nuitr for marktti"" to Stll tht product, tht n somtthing is M'rong.

High.Variety jIT Production

Manufacturing cells – ung sobrang daming parts para madaling gawin

Universals of Manufacturing
That is not to say that the company or plant involved in the WCM quest is completely surefooted. How, for example,
can progress be measured? How do the movers get reinforcement so that they stay inspired? The answer is to choose
the right goals of improvement and to organize the enterprise for continual progress against those goals. A host ofWCM
subgoals can be contained within two overriding goals. One is reduction of deviation, and the other
is reduction of variability.

Deviation reduction takes many forms. two of which rank above and subsume the rest :

(I) Red uce deviation from zero defects.

Zero defects (ZO) got its start in the United States in the early 1960s. ZD has been elevated to the top-a key
component of CEOlevel strategic planning-in many Fortune 500 companies. Phili p Crosby provided much of
the inspiration; W. Edwards Deming, Joseph Juran, and Armand Feigenbaum provided tools and concepts for
fitting ZO into companywide total qua lity control. Visible measures of success are the driving force.

(2) Reduce deviation from zero manufacturing lead time.

Lead time is a sure and truthful measure, because a plant can reduce it only by solving problems thaI cause
delays. Those cover the gamut: order-entry delays and errors, wrong blueprints or specifications, long setup
times and large lOIS, high defect counts, machines that break down, operators who are not well trained,
supervisors who do not coordi nate schedules, suppliers that are not dependable, long waits for inspeclors
or repair people, long transport distances, multiple handling steps, and stock record inaccuracies. Lead times
drop when those problems are solved. Lead times drop fast when Ihey are solved fast.

Variability Reduction
. If a ticket taker can sell a ticket in "exactly" thirty seconds nine out often times, bUlthen the machine jams and it
takes three hundred seconds to sell the ticket to tenth customer, consider the effects. Not only has the tenth customer
been poorly served, but at a rate of one customer every thirty seconds. ten new customers will have arrived, only to get
in line and wait while the jammed machine gets fi xed. Varying only once in a while from the thirty-second standard reo
quires wasteful solutions: Extra space for customers to li ne up; staff to manage the queue and sooth the customers;
perhaps an e.1tra, mostly redundant, ticket seller to keep the line from getting too long.

2. Line Operators and Operating Data

 Indulgency

I favor job enrichment, collaborative teams, quality circles, Theo ry Y, Theory Z, and quality·of-work-life
concepts. They help clean out the clogged arteries through which the lifeblood- information- is supposed to How. Those
programs are never failures.

How to do it has become crystal clear. The jobs of everyone in the fac tory must be changed. Most o f the line jobs
were direct labor (operator o r assembler), nothing mo re nor less. The new line jobs are direct labor plus a variety of
indirect duties- like preven ti ve maintena nce-pius some acti vities that have always been done by managers and staff
specialists. I refer to data recording, data analysis, and problem4 sol'lling.

Pencils and Chalk

Data re<:ording comes first. The tools are cheap and simple: pencils and chalk. Give those simple tools for recording
data to each operator. Then make it a natural part of the operator's job to record disturbances and measurements on c
harts and blackboards. The person who records data is inclined to analyze, and the analyzer is inclined to think of
solutions. Success depends on recording the right kind of data at the right time.

Yellow Lights

T he yellow light goes on many times a day. Eve ry assembler is likely to turn on the yellow at least once a day; each
time that happens, the previous assembler has to explain why. T here is lillIe reason to get embarrassed and go on the
defensive, because the assembler~ have the c hance to Slate the factor beyond their contro l that ca uses the slowdown.
(BOTTLENECK)

In conventiona l manufacturing no one records rea l causes. Each assembler then has the uncomfortable feeling \)r
being blamed ror most of the troubles: shutdowns, high costs, poor use or time, poor housekeeping, and bad quality.
The yellow-light approach not o nly gives pt.'Ople the chance to explain real causes; it has thcm explam right when the
event occurs, so there are no q uestions about bad memories and guessing.

Data AnalysiS

It is quite a ll right for industri al engi neers 10 pla n the in itial job assignments based on time standardS, but we
should thi nk of that as rough line balancing. Industrial engineers balance to the mythical standard person, but hair the
population are raster than that, and hair are slower. Thus, after the line runs for a while, the assemblers and the
supervisor should fine-tune by balancing the work to the capabilities of each assembler. The yellow lights provide good
data ror the rebalancing, (AI Kawasaki in Nebraska they use the phrase "balancing Ihe line by watching the lights.")

Red Lights

World-class manufacturing requires world-cl ass equipment, which means machines th at do not break dawn. That
means recording every cause in detail, sorti ng the causes, and orga ni zing projec t teams to solve permanen tly the
problems that recur.

Schedule Versus Actual

Another way to capture problem data is to do so at regu lar intervals, usually hourly. Hourly data may be recorded
011 a display bourd.
 The best of the rifle approaches is known as statistical process control (SPC). SPC takes aim at one or a few critical
factors in a process. The most common type of critica l factor relates to product quality: diameter, capacitance,
hardness, sharpness, data-entry errors, misspelled words. missing parts or data, and olhers. SPC may also be used 10
check on timeliness of deliveries, usage of material or other resources, or aimOSI any measurable factor.

SPC is not of much use in a job shop, because job order quantities are usuall y too small to draw samples from. There
are other ways to keep processes under control: • Keep tools clean and sharp, gauges calibrated, equipment in top
condition, blueprints and specifications correct, tools and material put in their proper places, and procedures up to dale
and on display. Mess, confusion, and sloppiness have been the nalu re of job shops; they can't be tolerated if the job
shop is 10 be world-class .

Ca re of Gauges. Tools. and Machines

A Japanese example sticks in my mind, however, My first trip to Japan included a visit to a refrigerator plant in the
Matsushi1a family of companies. The factory was a WCM showcase and was laid out in such a way as 10 impress the
louring visitor. As eye· catching as anyt hing on the tour were glass cases Ihat contained gauges. They were located in
work cenlers along the lour pat h. The glass was clean, the cases were under lock and key, and the gauges were
displayed like jewels in a jewelry store. An operator or supervisor was holder of the key and in charge of keeping
everything just right.

Keeping People Busy

The waits tend to be fairly long- thirty, forty-five, or sixty minutessince the operator has to rollow a "spec" manual
that tells how to make the given component or module. What should an ope rator do while waiting for a part?

Their chart on th e wall broke the hours into:

25.25 hours of cleanup, paperwork , typing, miscellaneous

I. 75 hours in meetings

1.75 hours of rework

8.50 hours on TQC

3.25 hours on procedures

No Incentive Pay

Incentive pay can be good (or not bad) in batch production, where the rule is "make as much as you can." It is bad in
JIT/IQC, where the rule is "make only what is used, as it is used. " kaasi pag jit may limit lang ung production kaya lugi
pag may incentive

Another promising approach is to put all wage·earners on salary. That provides more pay stabilit y but offers fewer
chances for an occa· sional big paycheck. In the growing number of companies that have taken this step, labor has
fended to suppo rt the tradeoff.

Slill another approach is to form cells and pay a group iucenlive. The best group inccntive would be one in which the
extra pa y is fo r quality, precision, and mee ting (not exceeding) the daily quola. I'eople from some companies have told
me I h.ll incentive pay is their biggest obstaclc, bu t clearly th ere are ways around it. For mosl companies. the people
transition problem is more basic.

Not Mere Participalion

Thai brand of participation is severely bounded. Acme is telling the operators what the chef might tell the restau
rant patrons: You can Sc

Today participation is OUI, and involvement is thc new buzz word. As buzz words go, involvement is a good one.

In vo lvement

Labor Skills/ Skilled Labor

Enginet!rs and tOOlmakers can be key players in setup simplification, but the most successful programs put the
responsibility and the leadership in the hands of the machine operators.

Table 2- 1 summarizes this ironic but gratifying change ill the role of t he mac hine operator. It also summarizes
earlier points about assembly work and assemblers: The old division of labor concept was to dtvide the job into narrow
elements; then unskilled people could be Imed off the street and learn an assembly job quickly with lillie tra inin g. The
WCM concept calls for assemblers to learn mull pic job skills, data collection dUlies, and diagnosis and prOblem-solving
fa /ents. This chapt er perhaps may be sUlllmarized as follows: Take the skiff Ollt of th e job; develop the skill of the
mind.

3. Staff as Supporting Actors

Line-Staff Partnership
Let's quit blaming shop people for bad performance.
Operators aren't superh uma n, and il is not rair [0 expec t too much or them; staff people ha ve to
shoulder most of the problem- solvmg burden.
The lasl chapler ex pl ained why: World.class manura ctUring puts line Opcru lors a nd assemblers in Ihe
dri ver's sea t and thereby pUIS latenl ta lents and polen tial to usc. A ce ntral, no, a periph. eral. role of stafl'
people is to be on call.

Staff "on Call" (freelance)

Doug was o ut on the fl oor solving problems lIluch of the time during Ihe work day. Most were prObably not scheduling
pf oblem!-o. They were problems of a ll ki nds. In Ihe JIT concepl , job 11t h:> mean hllle :.I nd respo nsibilit ies blur. A
problem has 10 be fixed ljUlc kly, and everyone musl hclp--as people do when their com munil ) !-o uOers H flood,
tornado, serio us earthquake, or OI ltcr disaster. When the red light goes on, people came on the rUIi to solve th e
problem berore it becomes a disaster.

And why not? H-P had a head stan, si nce the problem.')oh·cr!-o were already located in Ihe right place: nex t tn where
the produclion problems OCc ur.
I! should not be ha rd to find racto ry space to which salaried people can move. A J IT campaign rrees space where racks
once stood. The happy solution ror wh at to do with Ihe space is to move in the engineers and ot her support people and
mana"gcrs.

While the college recruils may expect a qu iet office, I do not think many are d isappointed if they are thrust into the
action of the plant instead-after a sedentary life of study and silting in lectu re halls in college.

Leverage Effects

staff people being pulled to the floor all the time. more staff will need to be hired 10 "keep the store." That is no
t the case, because WCM keeps things direct and simple. Simplicity in production is contagi ous,

1. Better maiIHenallce with fewer people in Ih e plalll mail/lena lice department.

Operators lubricate their own equipment :lIld learn 10 make adj uslmenls and simple repairs; Ihey come to feel
a sense of owncrship of the eq ui pment. Operators kecp their own work space spic lind span. (KONTI UNG MAINTENCE
KASI NGA UNG OPERETAOR SILA DIN UNG NAGLILINIS PARANG SA CENTENNIAL)

Even thoug h hours of operators' lime rep lace hou rs of maintenance peoplc's time, the cost of mai nt enance is
less. Therc are two reasons: One. the operators C'1Il fit some of the preveIHive IlllliIHen IlllliIHen<lnCe, repairs aND
cleanup into the wliit and dela y times that all Opcmtor" have.Two. the opera tor who is responsible for the produci
made will do a bell er job of keeping the equipment worki ng well than a support person who hasn 't the responsibilit y,
so th e costs of dowu equ ipment and bad production arc less.

2. Better quality with fewer people in the quality departmellt.

Thai means operators inspecting their own work or wo rk from a previous operat or, usc of process control cha
rts to prevent bad output, and discussing solutions to quality problems. The legions of inspectors are reduced to just a
few . The quality department's primary role changes to training, auditing, and laboratory testin g. The department's
status is cle· vated.

3 BeTTer accounting with fewer aCCOlUllalUS.

JlT wipes o ut large chunks of job shop delay, which greatly reduces th e nccounling. Cost validity improves,
because more of the costs nre direct, fewer are overhead.

4. BeTTer production con trol with fewer production CONTROLLers.

Materials people are supposed 10 keep the ri gh t amounts of stock o n hand and keep track o r it. That
is hard to do well, when there is the typical months' worth of the average it em in the facto ry.
The JIT plants in North America have cut it to weeks', sometimes days' or hours', worth. JlT also fosters
strict handling discipline: exacl IOnltlOnS, exact quantities in each container. Operators and material controllers
can see where the material is and when more IS needed. and they can count it quick ly and often to assure there
arc no mistakes.

6. Better informarion with less data processing.

InvoLvement Effects
1 Industrial engirl eering (IE) is responsible for work study. Any facto ry operative o r supervisor also can and
should perform work study,
These days Ihe most important Iype of work st udy is on selup and changeover lime reduction. Few IEs
have experience in this, so Ihe first slep is to get some: Starl by reading Shingo's e;(cdJent book o n single-minute
exchange of die (a good English Iranslalio'J2 exists); then participnte in a couple of studies. After Ihal, ~ack oft·
Illd focus o n training operators to lead their own setup projects.
A key WCM element is for everyone's job to include uncovering and recording problems and process
vnria tio n, and then trying to diagnose and solve the problems. Work study-by any name- therefore is a natural
element of WCM.
2 Purchasing Acquiring that first value takes too much time, there is too much red tape in gelling the right
purchased material , lind 100 oftell the lIlaterials !Urn out to be defective
3 Manufacturing engineering They were supposed to find machines that can make what the design engineers
design- and make it fast.The ME must spend some time with equipment sales reps but should spend more
with machine operato rs, setup crews, maintenance technicians. and supervisors. Most of the tangible
wealth of industry is in old equipmen t that is falling apart fast. Most of it is worth rescuing.
4 Design (mgilleers. The engineers who design products in th e R&D labs have been outsiders.
Quality is fitness for use, we are lold, and th~t means going to the custome r to see what uses the
customer has in mind.
WCM companies must see to it that there are ways for the customer to help the designer design the
product right
Making staff experts feel needed is a key that opens up opportulllties-like ways to add value and not
merely add cost.

Pipes and High-Speed Conveyors

Many who tend automated fill -lI nd·pack lines arc there to troubleshoot, to throwaway damaged packages, to
clean up messes, to make product changeovers, and to check and tweak the processes. Some of those support
people would nOI be necessa ry ir the conveyors were shortened. For example, ir a conveyor length is halved,
the lotal floor space occupied by the line would be reduced by perhaps a third. That is one-th ird less space to
clean, and if the product is food or drugs. cleanin g is frequent and costly. Another gain is that, with filling and
packaging stations close r together, each line tende r is able to cover more ground; tha t is, each can handle
mort! of the between-station trouble and perhaps monitor more than one slat ion.

Low-Speed Assembly Conveyors

For example, at Kawasa ki's motorcycle plant in Nebraska, a roller conveyor originally ran along the ruel tank
fabrication line for about ha lf the length of the buildin g. In 1983 the conveyor length was halved, and the
presses, welders, grinders, and other machines were shoved closer together. Shortcning the line made it
possible to get by with rewer people manning the line when demand ralls off. With thc longer conveyor, an
operator tending more than one station would spend as much time walking and pushing fuel tank pieces as
running machines.

Invisible Inventory
Emptying the I"-Baskets

In one company the first major project was to CUI order e:ntry and engineering time. which had been twenty-
two days. Study reveal
Long Icad limes occur because of backlogging, poor methods, "cherry.pick_ rng." and "diversions." Each
is briefiy discussed here.
• The backlog is the orders in the in·basket. Dacklogging mea ns too many orders are in the system far the order
pro.·e!lsors to handle.
• Factories do nOI have a corn!:r on bad methods; in offi ces fII cthod.\, lire al least as poor. A Com mon
eJlample is Checking the doc umen t at the end rather than during the process. Error ratcs 3re high in offices,
and rework is too. " I ."M', M •• , .. ~~ ~, ...... ...... .
• Cherry-picking is looking th rough the in-basket to find the " friendliest" job.
• Office employees are also adept at finding diversions: telephoning home, writing persona l letters, working
crossword puzzles all company time, shooting the breeze. Compa red with ractory rolks, office employees find it
easier to pursue diversions, because their work and their inventory- a piece of paper or an en try into computer
memory- is not very visible.
Carry-on-Ban
Carry-on·ban is just one technique aimed at getting pr.)jects done fast. It helps keep in-basket piles low and
delays short; il also reduces opportunities 10 cherry·pick. There are man y ca rry·on-ban van at ions. For
example, the ca rds may be produced only for urgen t Ieps or projects. in which case they serve as a priority
system.

4.Overstated Role or Capital (Automation in Slow Motion)

Spending our way to cost reduction is a flawed solulion. Automation is worthwhile if il improves upon
the performance or the cost of humans. But comparing a person wi th a machine is not straightforward. In the
complex conventional fa ctory, local changes have hard-to-predict global effects. Equipment feasibility slUdies
use only the obvious numbers, and they rarely consider the man y ways of doing much better with the people
and equipment on hand.

Engine Plam No. 9- it is "probably the mOst emc ient engine plant in th e world."1

As is true nea rly everywhere in Japa n, the plant runs just two shins, and preveOlive maintenance goes
on between shins and du ri ng the one-hour lunch breaks. When a machine is sc hed uled to ru n, it runs right.
Over the years the machines have been retrofitted so they don't miss a beat. Limit switches and elee tric
eyes chee k, coun t, and index. If a machine makes a bad part or breaks down, the giant ovcrhelld dcctricjidoka
signbo:lrd lights up and summons he lp to fix the problem right away. Qualit y problems are nipped in the bud,
so there is li ttle rework to do and little need to keep buffer stocks just in case of bad qua lit y.

High- Volume. Low-Cost

The 3178 is made in Raleigh, North Carolina, in whal is called a "project managcment centcr" (PMC). The
PMC has fr eewhee ling aUlh()rity, and th e management team decided 10 make a just-in-time commitment,
except that IBM ca lls it "continuous-Row manufacturing" (CFM) instead of JIT.
 Any experienced visitor can see thai the 3178 is a high-volume. low-cost product. Most visitors are likely
to go away thinking that the robots arc the key in the HVLC success. OUI are they?
Design. The 3178's predecessor was made "any way you want it," a product strat egy that raises havoc
in manufacturing and for the outside suppliers of component pa rts. The havoc was uycrted by OInking the 3178
a vanilla product- no features or options.
Quality at the source. Most of the component parts are bought, not made in 10M fabrication and
subassembly shops.
One thing is certain. If humans were building the product, they could diagnose and solye problems. They
could be moved easil y to other work if 3178 sales tapered off or fl uctuated wildly. More humans could be
inserted if more output were needed. A human work force could adapt easily to a new product when sa les on
the 3178 fade Robots are several orders of magnitude less flexible than humans.
Low-Volume, Low-Cost
Work-in-process inventory was expected to be just one day', wo rth. The designers of the product spent
time o n the shop floor with a 'ilx-ax is IBM robot tha t was in use experimentally. The Idea Wl.lS to find out what
the robot could do-what it could lift. how far it could reach and with what tu rn angles, what grippers il could
usc. and so forth. Then the designers went 10 work designing the new computer fo r assembly by robots.
How many robots were on order for the new producti on line? Zero. The designers did what was
necessary to be ready for robots. Then. Ihe idea is. don 't put any robots in-don', spend the moneyuntil
experience shows where they really can payoff. Experience will reveal Ihc tasks that a human operator cannot
do the same way in the s.1me invariable cycle time with dependabl y high qualily all day long. (The largest uses
of robolS in the world so far are in painting and welding, which tend to be difficult for humans to do the same
way over and over.)

Pre-automation The design engineer were do ing their part in what we ca ll pre-oulomotion: making it
pOssible and making it easy for a mindless machine, robot or otherwise. to do the work. Other aspects of pre-
automation are up to production people and process engineers. They must do the following:
I. Shorten reach distances.
2. Shorlen flow distances.
3. Put all tools and parts nearby and in exact locations.
4. Design packages. containers, racks, and fixtures so that every part and every tool is correctly aimed
and easy to grasp.
5. Design simple automatic checking dev ices that catch common errors-sometimes ca lled fail-safe
devices (pokayoke, in Japan).
The ma nagcrs and engineers at the Sunnyvale plant made decisions that seem consistent with this way
of jiJstifying equipment expenditures.The resu h is, I expect, a low break-even poilU for H-P's personal computer,
because ( I) lillie capital was needed for pial t space and equipment, (2) jobs were simplifi ed so that labor costs
per unit were lowered, and (3) mental capacity is still available on thl li ne. and the environment is conducive for
line people to keep sugg,:sling im- provements.

Machine Vision (ROBOTS UNG NAGING QUALITY CHECKER NILA KASI PAG TAO NAGKAKARON NG
VARIABILITY)
My Own ru le-of-thumb on vision-equipped rObots is that they make sense for prOCess Con trol where
human eyes arc defi cient. Visitors to Apple Computer's Macintosh fac tory in California have been impressed by
one such device. A robol inserts a 256K RAM chip in to a printed circuit board, and a vision device underneat h
the board cht:cks alI the leads to make sure thaI eaeh is bent at the proper angle. That is a complicated check.
 and a human could not do it well. Some of OM's planned uses of vision syStems for checking welds and for
seeing that no parts are missing are also Sou nd.

Linked Processes

When the transfer line is running well, and it may do so for several days in a row. it rea lly pumps out produce In the days of
conventional manufacturing, such a string of producti ve days bro ught smiles to everyone's fa ces. The work learn, the
maintenance people, and the supervisors might celebrate by going oul for a few drinks after work. In the lIT mode such days
of high OUlput a re bad and not allowed. The goal is 10 make only wha t is needed by the next process each day. The term for
this is "make 10 a number." If the daily schedule is met ea rly, SlOp the lin e; use the exira time for problem·solving sessions
and for preventive maintenance aimed al lenglhening the string of days without breakdown.

No Tolerance for Down Time

Only a small frac tion of a plant 's work centers are boulenecks. The bottleneck work centers hog the time lind attention of
engineers. technicians. and supervisors. One effect of buffer stock removal, a liT technique, is to turn all work cent crs inlO
bottlenecks so they receive problem·solving attention . That spreads Ihe staff experts thin; operators must be the first line of
attack 0 11 the problems that pop up when a buffer stock runout causes a work stoppage.

Operuror·Centered Preventive Maintenance

Many of the problems are machine malfun ctions and breakdowns. OperalOl'S can learn to adjust machines, but we
cannot expect operators suddenly to have the ex pertise to fix them when they break down. fh erefore, with all work cent ers
potential hot spots, the operat ors ncl."d to coolthcm off with daily rcgimens of preventive maintenancc, simple things like
adding lubricant, cheding for wear, list ening for the telltale whine or tick that suggests a serious problem.
"What do you think is the major n:ason for machine down time'?" About 10 percent answered: inadeq uate lubri·caliou.
ThaI answer provided the opening for Gossman's grouJl 10 go back to Ihe operators and say, in effect : You are
complaining about the job the maint enance department is doing on lubricating the rnachin(' l,. We are going to give that job
to so m~o ne we know will do II righ t- you. Ihe machine operator.
It is a natural step for the operat or to keep the area, as well as the machine. tidy and clean-no outside custodians.
Special machine setup crews become unneeded as the operator comes to know all about the machine. AI the same time,
world-class manufacturing companies a re rapidly shifting away from quality inspections by inspectors; the
operators control the process and perform any necessary inspections themselves. Routine machine maintenance, area
cleaning and arrangement, quality control, tool changing, 1001 care, and machinc loading and unloading all become duties of
the operator. They are not seen as a collection or diffcrent kinds 'or duties. The differences blur and become one job.

Making Time for Maintenance (KAILANGAN MAGLAAN NG ORAS SA HIGH LEVEL OF MAINTENNANCE KAILANGAN
MAHALIN UNG MACHINE)

With all this tender loving care by the operator, the machine is going to work better and last longer. Total preventive
mailllenance is that and more. The machine still needs attention from talented experts out of the maintenance department.
They need to perform hi gherlevel preventive maintenance, and to do so often. The problem is finding free time when the
machine is not running.
A vu i/able for Use (IT IS BETTER TO HAVE 2 SHIFTS THAN 3 SHIFTS BECAUSE MAINTENCAE OR THE DOWNTIME MAY
EFFECT THE PRODUCTION
The answer is no. Cos tly equipment deserves our best care, not Our worst. You might be able to prove by a cost analysis that
running three shins saves money, but you Would get that answer only by using average down. time data and also by ignoring
time when defecti ve product is being produced. High average down time is costly, but it is high down time va riability and bad
quality that can be fata l.
Part A ort he fig ure shows what many plants on three shifts experi ence. In the twenty-fou r-hou r period the machine (or
line) is up sixteen hours and dawn eight hours. Some of those eight bad hours might be times when the machine is running
but producing product thaI is unacceptable and has to be scrapped- which is worse than not run ning at all. The net good uti
lization of the equipment is 67 percent, as is ils availabi li ty to produce good product.
Part B of Figure 4-1 shows how the problems melt .:Jway with two-shift ing. There are freq uent hea vy doses of PM from
hours 8 to 12 and 20 to 24 each day. (Besides PM, the sch eduled down time may also be used for such things as tra ining,
overt ime, prototyping, machine warmu ps, and complicated setu ps.) The machine does not cause trouble any more. Its up
time is the same as ill A, 67 percent, but its availability for use when we want to use it now is 100 percent.
With no breakdowns, there is no need for buffer stock. With no buffer stock, the machines need not be separated with racks
or pallets of material and bulk handling equipmenl between. The machines are back to back.
buying equipment and then replacing it when its maintenance costs get too high and its performance gets too bad.
Equipment policy for the world-class manufac turer must be to keep maintenance costs from getting high and to keep
performance from deteriorating. TPM and statistical process control to detect abnormalities are the means.
Back-Office Efficiency (ORGANIZING LINES OR CELLS PARA BUMILIS UNG SERVEICE NILA TSAKA GUMAMIT NG
UNITARY MACHINE)

Cit iba nk, headquartered in Manhattan, grew fast in the 1960s-sofas t thaI a paper-processing disaster was waiting to happen.
Hugecomputers and a backroom staff' of 10,000 by 1970 did nOt defusethe bomb. Customers raged about errors and delays, and
paper anddata processing costs were growing by 15 percenl a year.\
The many hands that touched the transactions had to be linked.
White's team set up assembly lines accordi ng to Customcr types: one
line for local businesses, one for large corporations, one for OI her
banks, and so on. The o rga ni zation structure was nipped 90 degrees.
One manager was now in charge of each line.

To summarize, Citibank did not seule for the large improvemen in efficiency and quality that came from organizing now lines or
cells.They took the last step-unitary machines and work stations-which allowed a variety of transactions to be processed at one
place.

Gear Boxes NUMERICAL CONTROL MACHINE (If the variety of models is high and the volume of each is low, thc NC machine
is the logical c hoice. If there are a rew dominant models or gear box. then the cell of loosely coupled older machines is probably
best: Set up the cell for a run of eight of o ne model, then set up for perhaps fifteen of the next, then three of the next. Either way-
unitary machine ror low vol lime or ce ll for higher volume-gives excell ent JIT result s. compa red with conventional practices.)

To summarize. making a gear box requi red many SdUPS, plus IWO major moves across the plan!. It would nOI do to nluke and
move only one. A lot that would fill a whole wire basket or thai gear box model is more likely.

Now al the Cushman plan t an NC machine can make a gear box in o ne hour, and thc lot quantity can be just one. For a
quantity of one all a unitary machine. th ere is no need ror a wire basket. Ror transit inventory, ror rork lirts to transport across the
floor, and ror queues in different work centers. The unitary mac hine seems to be the answer to a JITer's prayers.

The decision to NC or not NC really boils down to a question or model variety and volume. If the variety of models is high
and the volume of each is low, thc NC machine is the logical c hoice. If there are a rew dominant models or gear box. then the cell of
loosely coupled older machines is probably best: Set up the cell for a run of eight of o ne model, then set up for perhaps fifteen of
the next, then three of the next. Either way- unitary machine ror low vol lime or ce ll for higher volume-gives excell ent JIT result s.
compa red with conventional practices. Some general principles emerge.

Principle no. 1. DO not put in equipment simply to displace labor. Equipment cannot think or solve problems; humans can. Our past
railures to use shop floor people as problem.solvers have shaped the view that labor is a problem. The WCM view is th at equipment
is a problem. and labor is an opportunity.
Prin cip le no. 2. The main advantage that equipment has (over people) is to decrease variabilit y: uniform motions, uniform cycle
times, unirorm quality.
Corollary A. Employ TPM to make present equipment completely reliable so it can do a job in a uniform. dependable cycle time
with no question about quality.
Corollary B. Employ pre·automation to eliminate search time and thereby make the operation cycle time shorter and more uniform.
Corollary C. Link machines together only if the reeder machine is reliable.
Corollary D. Buy small , simple machines one by one as demand grows instead or large, complex. machines. Smaller machines are
easier 10 maintain. and several instead of one provide protection against a disastrous failure. Other reasons for small machines in
multiple copies have to do with refinements on the old economy-of-scale concept, a topic in the next chapter.
Where there is skill at managing equipment, there is reason to press for automati on at a faste r pace, because world-
class manufacturi ng demands rhe capabi!ily of machines and automation to reduce va riability.

5 Economy or Multiples MAS MARAMING MACHINE ( WCM PAY

ATTENTION TO SOME OTHER MACHINES CAPABILITIES)

The rule has proofs to back it up. If the proofs are valid for traditional manufacturi ng, they surely are not for
world-class manufact uring. The obvious costs-the amortized cost of the mac hine and the labor to operate it-
only scratch the surface. WCM requires paying heed to some other machine capabilities-which together
overshadow the surface costs:

• How fast the machine can be set up

• How easy it is to maintain the machine and keep it maki ng good product
• How easily the machine may be moved
• Whether the machine's speed can be adjusted up and down to ma tch up-and-down use rates at next
processes and up-and-down fina l demand rates
• Whether the machine's price is low enough for multiple copies of it to be bought over time,
matched to the growth of demand.

Machines Dictating Policy (UNG MACHINE UNG NAGDIDIKTA KASE MAHAL SYA MASYADO KAYA KAILANGAN
NILA MAKABAWI KAYA UNG MGA MARKETING NAPREPRESURE DAHIL KAILANGAN NG MORE DEMANDS)

A typical equipment cycle- we might call it the supermachine cycle-is as follows:

1. Marketing projects growth in demand.
2. Decision is made to add capacity.
3. Engineering sea rches machine tool manufacturers' ca talogs; se. leels large machine-enough capacity for
three to f:ve years of projected demand growth. In the name of th e six -knths rule, two or more identical
smaller machines are rejected in favor of the larger one.
4. Machine is installed and debugged, which lakes severa l weeks or months, owi ng to the large machine's
complexity and needs for special utility hookups and perhaps a reinforCed-concrete base.
5. Machine is mostly underused in its first two o r three years.
6. Dema nd growth catches up with machine's capacity. Machine finally is fu lly utiliZed-three shirts a day- in the
fourth year.
7. Three-shift operations allow little time for maintenance; neglect results in only about two shirts of up-and-
good production.
8. Machine's capacity and reliability are inadequate; time to buy another supermachine-and repea! the cycle.

The supermachine's utilization rate plunges. Everyone is nervous, because "that machine that we just paid
S400,ooo for is id le:' Now the problem is too much capacity. Furthermore. the $400.000 is tied up in yesterday's
technology, and retained earnings are no t being generated to pay for tomorrow's advanced equipment.
Marketing is under pressure to mount an advertiSing campaign, cut prices, sell something that will keep the
supermachine busy. The machine has become the master, dictating policy.

High-Risk Strategy ( WAG GAYAHIN WAG MAG INVEST NG MALAKI MASYADO AGAD AGAD)
The high equipment expenditures were partly offset by avoidance of costly delays and inventories between
process stages. Production was laid o ut in a serpen tine How path with sho rt distances, and there were scarcely
any places where buffer stocks could build between processes. Short lengths of conveyor kept the product
moving from machine to machine in the large two-Hoor facility. The manufacturing engineers had done their
part in improving the chances that the glowing market surveys wou ld come true. Market response times (lead
times) would be short, and quality would be high. Even though the equipment was expensive, unit costs would
be low if the product sold as well as expected.
II didn't. If sales had met the forecast, the facility would have been operating three shifts by midyea r 1983. It
was not even running half a shift. The product was a failure, and a costly one at that. Some of the equipment
could be used elsewhere, but much of it could not, and the clean rooms were immobile-part of the structu re.

that kind of disaster occurs in every company (and is 10 no way a negative comment about Tektronix, which is
among the leaders in implementing WCM concepts). Those who study such things tell us thai two out of three
product introductions fail . Probably in the hightech sector the failure rate is higher. Let us see what Thorn and
Peterson did to ensure that, if the color-shutler product were a market failure. it would not be a financial
disaster.

Low-R"isk Strategy (MAGSTART SA MALIIT NG MGA MACHINE TAPOS ADD UP NLANG)

The Thorn- Peterson plan was to buy capacit y in small increments. that is, add more increments as demand
grows. A representative example (not the real fi gures): Buy enough capacit y for eight to twel ve months'
projected demand growth as the first increment. Install it, start producing. and place orders for a second
increment. If demand is less than expected. slow down deliveries of the equipment; if Ihe product is a market
failure, cancel the equipment orders and kill the project.

There are several models of the color-shutter product. Jfchangeovcr time from model to model is very shorl.
each li ne has the fl exibility to run mixed models. Alternati vely, if some machines resist quick changeover, line I
may be dedicated to model A. line 2 to l1Iodel B. and line 3 to model C. Either way- mi xed-modet or di ca d
linessome of every model is produced and is ava ilable for sa le c\'ery day. That gets marketing off the hook; it
does not need to guess correctly the model mix that customers will be buying. If Thorn and Pet erson had
planned equipment for the color-shutt er product in the usual way, there would be a single targe. COSily.
highcapacity line. Model·to-model changeovers would take hours or days. That would dictat e a long production
cycle: model A made this week, B next week. C the third wee:k. and 0 the fourth. Marketing would have: to try
to guess the sales ral e wee:ks or months out-at the: far end of the production cycle. Large finished goods
inventories (FOI) of every model would be needed to protect against underestimates. More: FGt. a good deal
more. would be heaped up in distribution cente:rs to guard against production stoppages. which are a certainty
when there is only one large, complex production line: ins lead of several small, simple ones

Adding Fixed Capacity the Way We Add People

Space is still cheap in No rth Ameri ca, and capita l has been relatively plentiful on th is continent (though in
recent years we did not spend much of it in our factories). With those "advantag:es" we did 1I0t learn to be
frugal and cautious in buying equipment. Also, as 1I0ted ill Chapter 4, North America has no t had socia! policies
that make it hard to staff a third shift, as is the case in Japan and some Eu ropean countries. Therefore. when we
buy a large increment of capacity, we may run it o ne shift the first year, two the second yeRr. and three the
third; and in the three-sh ift stage there is no lime for main tenance. and we run the eq uipment into the grou
nd. We useor misuse-labor. which is highly fl exible, to make up for thc equ ipmen t infl.exibility that comes from
installing single large-capacity productio n facilities instead of multiple small ones.

Space is still cheap in No rth Ameri ca, and capita l has been relatively plentiful on th is continent
(though in recent years we did not spend much of it in our factories). With those "advantag:es" we did 1I0t learn
to be frugal and cautious in buying equipment.
We useor misuse-labor. which is highly fl exible, to make up for thc equ ipmen t infl.exibility that comes
from installing single large-capacity productio n facilities instead of multiple small ones.
I. More Ihan one leom. cell. line. or Inachine is better than one. Two teams and sets of equipment
making the same prod ucl (If product fam ily are in friendly competition for results when thin gs arc going well.
They back each other up so tha t sales need not be lost when things a re not going so well.
2. Add fixed capacity the way we add people: in small IIIcremellfs as demand grows. The lesson applies
not only to single machine types lind cells bu t also to whole product fl. ow lines. manual or automated, and
even whole factories.

Whole Faciories (SMALL INCREMENTS PAUNTI UNTING PAGBILI NG GAMIT HABANG TUMATAAS UNG SALES
OR DEMAND)

Toyota's Kamigo engine plant no. 9, men tioned in glowing terms in Chapter 4. is an example of adding
whole plants in small increments. No. 9 is one of a Siring of engine plants that Toyota has built side by side as
demand has grown over the years. Toyota could have JUSt enla rged the original plant a nd replaced low-ca
pacity transfer lines with larger-capacity lines. Not doing it that way spares Toyota from hodge-podge and from
havi ng "all its eggs in o ne basket."

Heat· Treat
The small increments concept applies to nearly any ty pe of equipment. Heat-treat equipment is a
common example, and experiences at Omark Industries serve to ill ustrate.
The problem was heal·treat. After the saw blades were formedin small amounts through cells and flow
lines-they had to be sent to the large cen tral heat-treat oven, which processed blades in large batches. If a large
oven heat-treated a thousand blades per batch, a thousand would come out at a time. Then 999 of them would
have to sit waiting to be siphoned off o ne at a time for assembly. That adds to manufacturing lead time,
carrying costs, potential scrap/ rework, and all the other ills of invento ry retention and process lead time.
While the sto ry might have stopped there and neatly illustrated the multiple small machine concept,
the Guelph plant went one step rurther. Purchasing round a pretempered Iype of steel that did not need to be
heat-treated. In going 10 no heat-treat at all, the lead time was cut from three days to o ne day, and the How
distance dropped from 8S0 to 173 feet3

A Side Issue: Toolmaking and Machine Tools ( KAINLANGAN MATUTO KANG GUMAWA NG SARILI
MONG TOOLS PARA SA COMPANY PARA MAPABILIS UNG PROCESS WHEN DEMAND GROWS KAILANGAN
IKAW DIN KUNG MASYADONG ADVANCE TSAKA KA PALANG BUMILI SA LABAS)

A side comment on Omark seems appropriate. Why has the company been so successful in its WCM efforts?
One reason, I think, is Omark's stro ng toolmaking capability. People in the company say they think they have
the best toolmaker in the land. a rellow who has taught the toolmaking art to others. Omark had to have that
capability years ago when it got into the manufacture of saw chain; it couldn 't go out and buy saw.chain-making
machine tools. Omark retained that strength. It came in handy when the company emba rked on its first 83 .. v "
...... l..1.A.">.:'I """,,"U""l:1 U MINc.; si gnificant JIT thrust, which was q uick machine setup projects. The
toolmakers could quickly make any machine modifi cation tha I engineers o r ope rators could think up. A WCM
trait i .. moving the most innovati ve machine operators into the tool room-for higher pay and prestige.

Hayes a nd Wheelwright suggest that by experiencing no pressure from their industrial custom· ers to
innovate, the machine trol industry grew stale

The best policy may be something like this: Make your own equipment wherever possible, because (I) it
shortens the lead time, (2) you can prod uce small-capacity machines and add more as demand grows, (3) you ca
n design fo r your own narrow needs and perha ps keep costs lower, and (4) you reta in the expe rtise so that
you can keep improving and " foolproofing" the equi pment. Buy from ou tside when you need adva nced, stale
of the art expertise- which the machine tool industry should be able to provide.

Wu ve-Solderirlg

While the small wave-solderer is an excellent example of a "JlT machine," man y of the !i- t0-20s listed in the
Appendix that are electronics manufacturers do not yet have one. They already own a large one that works well,
and the " sunk cost" of the large machine inhibits change. Perhaps the best approach for those companies is to
keep the large one for a while and dedicate it to one product family in one part of the plant; buy one small
machine and dedicate it to a second product family in another pa rt of the plant. Continue to add small oncs
over time. One of the benefits of this sort of strategy is that it creates factories-within-factories. which is the to
pic of the nex.t chapter.

Learning
The learning that comes from this kind of improvement cycle can" not be bought with money.
Competitors cannot succeed unless they go through th e learning-improvemem cycle themselves.
To summarize, the econom),·of·scalc concept correctly identifies the opportunity that greater sa les
offer. Learning on a large scale. not equipment and plants on a large scale, explains how the concept works.

Economy of scale

Slowing Down the Machine

Much of the time, however, sales are nol growi ng but are going up and then down. Manuracturing is
nOI world-class unless il is able to respond well 10 sales ups and downs, and that means flexible production
rates: Match the production rate to th e up-and-down use rales at next processes a~d to up.and. down final
demand rates.

We are not used to the idea. Instead, the Western way has been to run flat out- IO see the machi ne
smoking and throwing sparksuntil there is no more raw m81erial or no more space to hold the excess
production. Stated th at way, it sounds like madness. Al.:t llall y the reasons for that mode of ope ration seemed
10 make sense in an ea rlier era. Before conSideri ng those reasons, let us look at an example or slowing down a
machine to th e sales rate.
Dialing Down (PAG BINILISAN UNG ISANG PROCESS LALONG TATAGAL KASI MAPAPABILIS DIN UNG
DOWNTIME MASISISRA AGAD KAYA WAG ABUSUHIN )

"Don't you think we run our equipment wa)' too rast in the Unit ed States-our high-speed packaging
lines, for example?" "Everybody runs their packaging lines too fast and hard," I agreed.
Plant-level people know about the folly of running rast only to cause more stoppages. This message is
fina lly reaching the decision· making echelons so that something can be done about it.
Slowing equipment down is resisted the most in the continuous process industries, where there often
are acute start up problems. An example that comes to mind is a factory that produces a bimetallic material ror
thermostats. The product is made on a large "bondermiller" that uncoils two different types of metal, bonds
them together under pressure, and mills the bonded material to the right thickness. It was not economical to
run less than twenty-four hours a day because of the large cost of heating up and starting the machine. Demand
had been slack in recent months, and the machine was run ten days and shut down twenty days each month.

Could the machine be run more slowly-specifically. at one·third speed? The answer was yes. Would it
run better-produce beller·quality product-ir it ran at one-third speed? The answer was probably. Would it be
easier to maintain on the fly ir il ran mor!'! slowly? The answer was yes. Were there any reasons not to run it
slowly? Not really. The machine operator, a versatile rellow, could adj ust 10 a differ!'!nt work pattern: monitor
several pieces of equipment at the same time rather than ten days of scrambling tryi ng to k!'!cp the bonder·
miller working, followed by a similar stint at anot her machine.

Work Rules (NAGING RULES UNG KAHIT SOBRA NA UNG GAWA MO AT NAPUPUNO NA UNG FACILITY
GAGAWA KA PA DIN)

Tony Lipari, liT manager for the air clea ner, and his staff can. cl uded that the carts of stock were not
needed. The excess was used up, a nd the roll.former was integra ted imo the lIT pull system. What about the
opera tor? Honeywell's Contract with the un ion includes some of the standard work ru les tha i limit moving
operat ors to other jobs. Rules of that sarI have not been the obstacles to lIT tha t we might have expected. In
many unioniZed plants, like Honey. well 's Consumer Products Di vision, Ihe work rules crumble (or are wi nked
at) when there seems to be good reason. The past a pproach_ stay at your machine and produce, even if the
stock rooms arc already full of parts from your machine--was wastefu l

Frequent Speed Changes

1.What is to be done to keep the mac hine operato r busy if the mac hine is sto pped o r slowed down?
WCM demands that operators be versatil e. able to move to where the work is. In the short run, hour to hour.
there is often enough work, other than making parts. righ t there at the work station.
There is also plenty of training, machine maintenance, cleanup, and olher work of an indirec t na ture to
be done. Planned machine stops are welcome in that they provide needed time for employee involvement in
such things. (TO HAVE TIME IN OTHER ACTIVITIES)
2 How can changes in usage rates be communicated back to the maker? That is management by sight,
and it is made eminently possible when the feeder mac hine and the user machine are right next to each other.
3 Can the machine be slowed down? It is no problem with stan· dard mac hine tools that make or test
discrete parts (KAILANGAN UNG MACHINE FLEXIBLE SA CHANGES KASI KADALASAN UN UNG NAGIGING SIRA)
 4 The utilizatio n issue bears careful scrutiny (DAHAN DAHANG INEEXAMINE)

Utilization (MAGAMIT NG TAMA, PERO DAHIL UNG IBANG MACHINE MABAGAL PARANG BINEBENTA TAPOS
DAHIL MABULIS NA NAG OOVER PRODUCED )

One such bad decision is to overproduce in order to make this qua rter's utilization statistic look good. Next
quarter's output will have TO be cut, but we often do not look that far ahead. We hope for a sales upturn that will use
up excess inventory and keep capacity busy next quarter

A worse decision is always to run jobs on the fastest machines. Then we set aside (he slower ones and try to get
them declared as excess. Sell them off so that total capacity falls and overall machine utilization goes up. Revenue on
sale of the machine, tax writeoffs, and space savings add to the feeling that a good dccision was made.

Equipmetll Hours

JIT may show poor utilization of equipment hours, since the lIT concept calls for stopping rather than making
product before it is needed or making it wrong. Utilization of equipment hours or rated capacity, however, is a trivial
concern. Utili za tion of equipment dollars is the rea l issue. By the dollars measure, JIT policies shine.

Equipment Dollars

ConVENtional Manufacturing

 Large.lot production
 High.capacity generalpurpose machines

 COSily equipmcnt; A LOST hour is EXPENISVE

 CompleX equipment, so much debugging, down time
 Large machines no t fully ulilized early in product tife cycles
 Queuing EFFEeCts; cycles of overtime and underuSE

JIT

 SmaH.lot production
 Low CAapacity, specialpurpose machines
Lowo Cost equipment; a lost hour is minor cost
 SimpLE tquipment, so little debugging. Down time
 Small machines added onE by one as sales grow
 Regular schedule. Steady use of capacilY

The lesson is clear: Capacity utilization should not be used as a measure of pla nt ma nagement
performance. It is misrepresent ative and destructive.
The last of the reasons for the sudden un popularity of larger machines is that they are nol easily moved. Wh
y should the world-class manufact urer have particular needs for movable equipment? Let us see.

Movability – (special shock-n.:sistant platform)

Life Cycles and Sales Volumes

 Today movability is much more important. Product life cycles are being compressed, we are told.

Steven Jobs, cofounder of Apple Computer, says of the Macintosh factory: "Because it was designed t.o last
only thirty months, we can tear the line down, sell the metal for scrap, and build a better one.":

Move t0 Improve (rapid improvement means frequent change, including changing the locations of
equipment)

No, the shortenin g of product life cycles is not the reason why movability is so important to the world-class
manufacturer. The reason is that a plant cannot be world-class if it does not achieve continual and rapid
improvement. Rapid improvement is part of the WCM definition. and rapid improvement means frequent
change, including changing the locations of equipment.
Figure 5-2 shows the impact on movable resources. At slow rates of improvemen t. we may need 10 move a
machine every two years, a person or rack every two months, and a die every two days. AI fast rales, we may
need 10 make those kinds of moves every two mont hs, two weeks. and two minutes.\

Movable Racks
The Tennan t Co. in Minneapolis now sto ~ man y of the parts for its industrial scrubbers and Hoor
sweepers in "WOW carts" (warehouse on wheels). The obvious advantage is thut the rack can do double duty as
the transporter.
ASI RS and FMS
In some people's minds, a flexible manufact uring system is a step in the world-class di rection almost by
definition, because an FMS has fast response to the customer as its chief claim to fame. It is hasty 10 confer
WCM status upon a definition, however. The high cost of an FMS must be justified, and one of the j ustifica tions
is using the FMS in Ihe JlT, not the batch mode. Another feature that a "good" FMS ought to have is simple parts
transfer and aUlomatic guided vehicles (AGV), not ri gid overhead o r floor-embedded chains. (No FMS facilities
are ill Ihe 5-10-20s list in th e Appendix. because their high costs make their worth hard to judge.)

The CIM fnclOry, it seems, will have automated design cells feeding automated cutting cells feeding
automated fabri cation cells-all th e way through to outbound freight. Host computers will ove rsee and direct
the whole works. There will not be much to store, since the host computer will direct a provider cell to go into
action only when a user cell is about ready. Cell-tocell coordination won't ever be perfect, so there will be some
need for racks. They will not be of the large, central AS/ RS variety.

Quick-Change Artistry
When J think of movability, the feats of a stage crew come to mind: complex SCene changes in minutes. 1
don't know of factories that ca n move work stations around in minutes, but I know of one that can do it in a
modest number of hours. It is th e assembly plant for Hewlett-Packa rd's Personal Office Computer Division,
located in Sunnyvale, Ca lifornia.

"most of the equipment is on casters."

At that time the plant produced th e H-P 150 personal computer. The I SO was nOI a big sales success. What
if the product had been a winner and they had needed to ramp up production in a hurry? The flexible plant
configuration minimizes the problem. A central final assembly line was sandwiched between two iden tical
serpentine printed-circuil assembly (PCA) lines. Adjoining space th at had contai ned desks and support people
could be cleared out, and a nother production module (two PCA lines with fin al assembly between) could fi ll
the space. Helter-skelter layout would be avoided. Rhodes estimated that it would take only six weeks to double
capacity.

Size for Performance

In this and previo us chapters, o utsized machin es have Leen raked oyer the coals. The fact that
supermachines are detrimental to the WCM ca use does not mean that "smaJi is beautiful" (the ti tle of a book
popular in Ihe 1970s).~ Where equipment is concerned, small is not beautiful; we shall not go back to hand lools
and COllage industries. By human standards, there are few machines that are not large. Machines and
automation offer means of performin g tasks Wll h precision a nd invariability that far exceed the capabilities of
humans. Giant-size equipment usuall y does no t yield mo re precision and inva riability- indeed, it often yields
less-than no rmal-size equipment. In acquiring equipment, the commonsense rule-Qf-thumb is this: Bu y for
performance, not for yolume.

Tight Linkages

I used plant configuration, but that term is only somewhat 'Jroader than plant layout.)
WCM requires orga nizing for quick product flow and tight processto-process a nd person-to-person
linkages.
When responsibility centers a re operating, the procrastinating, finger-pointing, and alibiing fade; ihe slag~ is
set for conversion to a culture of continuous improvement. Management and the staff groups then have the job
of channeling the improvements and speeding up the improvement rat e. Most plants worldwide (including
Japan) are, for many reasons, badly organiZed. It may la ke a long lime and SOme money, too, 1.0 change the
plant orga niza tion. Wha t can be ' done in the meantime to make the best of a bad plant organization? Some
answers are included in the fOllowing discussion of the different kinds of plant org

Bad/ Good Plant Organization

6 Responsibility Centers
7 Quality: Zeroing In
8 Design Leverage
9 Partners in Profit: Suppliers. Carriers, Customers
10 Models, Simple Systems
11 Managing the Transformation
12 Training: The Catalyst
13 Strategy Revealed
NC (NUMERICAL CONTROL)

ECONOMY OF SCALE