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ОглавлениеECONOMICS OF ADVANCED MANUFACTURING TECHNOLOGY
The global competition in manufacturing industries has focused on producing quality parts quickly and accurately. This attention to the quality of products, along with the increased productivity necessary to compete globally, has led more and more manufacturers to introduce advanced manufacturing technologies. This appears to be the strategy of companies striving to become world-class competitors; generally it involves the use of the latest machine tools, cutting tools, and manufacturing processes which are expensive and sometimes difficult to justify using the traditional accounting practices.
The major opposition to introducing advanced manufacturing technologies seems to be the fact that many companies are still using traditional cost accounting and justification methods of the past. These methods are too short-term and too bottom-line oriented and do not consider the effects and benefits that advanced technologies can have on the entire company’s competitive position in world trade. What is required is the extension of traditional cost accounting to include a softer relationship that goes beyond purely financial measures. It must consider the sometimes intangible effects that advanced technologies can have on the customer which in turn can affect the entire company. Recent surveys reveal that 92% of those responding believe that the biggest barriers to using new manufacturing technologies are related to management and not to technical problems. Four factors seem to confirm the reasons for their unwillingness to invest:
1.The misconceptions of the past and the present economic conditions.
▪There is an overemphasis on direct labor costs which in the past amounted to as much as 50% of the total product cost.
▪In the 1990s, the approximate division of manufacturing costs is was follows: direct labor – 10%, material – 55%, overhead – 20%, and indirect labor – 15%, Fig. 1-2-1.
2.The bias against capital equipment investment because of the critical errors in the way the theory is applied.
▪A common mistake is only considering the cost of the piece of the technological equipment and not its effect on the entire manufacturing operation.
3.The failure to deal with or understand any of the important factors relating to the company’s business philosophy.
▪Many projects can be justified on direct productivity savings, reduced warranty costs, reductions in scrap, and rework costs, Fig. 1-2-2.
4.Setting high hurdle rates for evaluating new technology, believing this will result in high-return profits, rather than introducing new product and process technology to improve product accuracy and manufacturing productivity.
▪Delaying investments for advanced manufacturing technologies can result in a competitor gaining a market advantage that may be difficult or impossible to reverse.
Fig. 1-2-1 The changing manufacturing costs between the 1920s and the 1990s shows a major reduction in labor costs. (Courtesy Cincinnati Milacron, Inc.)
BASIC JUSTIFICATION APPROACHES
There are three basic approaches on how to justify the replacement of machines, tools, and processes, Fig 1-2-3. Industrial equipment justification is generally a management decision that is critical to the quality and price of the finished product. It often determines whether a company’s product will survive in the marketplace or how long a company will remain in business.
1.The defensive approach is where no capital equipment, major tools, or manufacturing processes are purchased until something wears out and cannot be repaired.
At that time, the equipment is replaced with comparable equipment with no thought given to any changes in the manufacturing method.
▪This approach is relatively easy, however it is generally leads to a loss of the company’s position in the marketplace.
Fig. 1-2-2 Factors that can determine the justification of an advanced manufacturing technology. (Courtesy Kelmar Associates)
Fig. 1-2-3 Types of justification approaches. (Courtesy Kelmar Associates)
2.The cost saving approach is basically a conservative approach that offers some degree of overall progress.
▪A piece of equipment is replaced with a similar kind that offers some manufacturing improvements.
▪There is no concentrated effort to see whether the entire operation, tools, or process should be changed.
▪The investment is made as long as the ROI (return on investment) looks favorable.
3.The aggressive approach takes a critical look at the present equipment and manufacturing processes to see if they are really the best ones that will keep them competitive in the marketplace.
▪It may mean a complete change in concept or methodology that offers the best possibilities for real changes in a manufacturing process.
▪This approach is the most difficult to justify by a dollar-and-cents formula, however, it may be the only way to generate new revenue and increase the competitive position of the company.
COSTING METHODS
There are two different types of costing methods: traditional and advanced manufacturing technology, Fig. 1-2-4.
Traditional Costing
Traditional costs are those that have always been recognized as permanent or essential to the process.
▪The purchase prices of the machine, process, and tooling
▪The cost of expendable tools and equipment
▪Labor and overhead costs per part
▪The setup and tool-change time
▪The number of parts produced in a cycle
▪The life of the machine, process, or tooling
Fig. 1-2-4 The two types of costing methods commonly used to justify expenditures. (Courtesy Kelmar Associates)
Advanced Manufacturing Technology Costing
Advanced Manufacturing Technology (AMT) costs are those that become important as a result of the effect they have on the entire company.
▪The reduced cost of storing and delivering tools to the workstation because of their extended life
▪Fewer tools required in inventory to meet the production schedule that reduces JIT (Just in Time) and inventory costs
▪Because of the quality of the machines and tools, there is less maintenance and therefore lower labor costs
▪Less scrap and rework resulting from the reliability of the machines and tools
▪The accuracy and repeatability of the machines increasing the productivity and the product quality
▪Greater customer satisfaction with the product quality that results in increased sales
JUSTIFYING THE INVESTMENT
The following look at justification is based on a realistic assessment of the impact that advanced manufacturing technology has on the manufacturing operation, the organization, and the corporate strategies.
Investment management should be seen as more than a budgeting process for capital outlays on new machines and manufacturing processes. The common thread that binds all successful automation implementation is careful planning that considers the long-range benefits and the risks involved. New technological investments that involve greater productivity potential must be evaluated on their projected competitive advantage and related benefits such as:
▪improved and/or more consistent product quality
▪greater flexibility
▪shorter throughput and lead time
▪reduced inventory
▪less floor space required – A new technology machine or process generally out-produces two or more machines.
▪Reduced indirect manufacturing costs that could include:
•material handling equipment and personnel material handling equipment and personnel
•the number of machines required
•scrap, rework, and warranty claims
•maintenance and disposable tooling costs
•QC (quality control) personnel
•light, heat, taxes, and insurance
An effective business plan, Fig. 1-2-5 should be a three-tiered approach based upon:
▪A global or strategic plan that considers the requirements for competing in the world marketplace
▪The business plan that develops strategies to compete around the world
▪A detailed manufacturing plan that identifies activities in support of the business and strategic plans to become a low-cost, high-quality producer.
•This plan must deal with components such as product cost, product quality and reliability, delivery lead times, and frequency of new products.
Fig. 1-2-5 An effective business plan includes three factors. (Courtesy Kelmar Associates)
By examining the non-technical concepts of a manufacturing plan, such as GT (Group Technology) or JIT (Just-In-Time) manufacturing, can become more productive with very little capital investment. These two factors provide the greatest savings, representing a large down payment on new technology, yielding benefits such as:
▪90% reduction in inventory
▪90% decrease in lead time
▪75% reduction in setup time
▪50% more efficient use of floor space
A well-planned manufacturing installation can dramatically improve product quality, reduce scrap and rework, and increase the company’s flexibility to respond to the changes in production requirements and the marketplace. The goal of new technology should never be to eliminate labor but to increase the flow of product through a plant, improve the product quality, and be able to quickly respond to customer’s needs.
COMMON JUSTIFICATION PITFALLS
Technology has dramatically changed manufacturing cost behavior patterns. The direct labor and inventory costs are decreasing, while depreciation, engineering, and data processing costs are increasing. Traditional financial systems focus on labor and inventory, and do not consider the benefits of flexibility, product quality, and customer service.
Major Pitfalls
▪Using traditional cost accounting/performance measuring systems that rely on labor, and price per part
▪Setting high ROI (Return On Investment) hurdle rates and applying the same rate to new and strategic product lines
▪Little or no consideration of alternative methods of improving productivity and product quality
▪Resistance to identify the benefits of advanced technology properly
▪Failure to consider the effects that not introducing new technology may have on the company
▪Failure to understand that traditional ROI/DCF (discounted cash flow) justification methods do not consider the effect that advanced technology can have on the future of the company
The biggest problem is that the relationship between improved cost and improved market share is not fully understood or even considered.
A JUSTIFICATION STRATEGY
It must first be understood that traditional methods do not completely assess the impact of introducing advanced technology, be it machine tools, manufacturing processes, or tooling on the entire company. Justifying the benefits, tangible or intangible, of advanced technology is not impossible if the company has a well-defined plan. The following points should be considered:
▪What is the value of consistent and superior product quality?
▪What is the cost of scrap, rework, and large inventories?
▪What is the cost of missed delivery dates, lost contracts, and shrinking market share?
▪What is the value of greater flexibility and the ability to respond to market changes quickly?
▪What is the cost of not being able to hold existing markets or open new markets due to lack of competitive equipment or the capacity of the company?
▪What is the value of increased productivity and reduced lead-time?
▪What is the cost of product and prototype development, engineering changes, work-in-process, inventory, and inefficient use of equipment and facilities?
Only by identifying the real cost drivers can the benefits of advanced manufacturing technology be valued and justified.
JUSTIFYING NEW PROCESSES
New manufacturing processes usually involve adding of new equipment or tools; the key benefits are not always easy to identify. Rapid prototyping - a process that can involve the use of laser, photochemistry, optical scanning, and computer technology - is used to make a three-dimensional prototype (model) from a CAD file one layer at a time, Fig. 1-2-6.
Rapid Prototyping allows product designers and manufacturing engineers to see and hold a physical model of a new product in as little as a day after the prototyping begins. Any technology that can radically improve the ability of a company to compete more effectively is worth the effort it takes to prepare a solid proposal for its acquisition. Most of the guidelines shown in Fig. 1-2-7, even though they are directed to Rapid Prototyping, should apply when attempting to justify any advanced manufacturing technology.
1.The Executive Summary
▪A one-half- to one-page long document that describes the present manufacturing operation and why it is necessary for the company to consider the benefits of the new technology.
Fig. 1-2-6 Rapid Prototyping is used to create prototype models for new products. (Courtesy 3D Systems)
▪Identify the productivity-increase factor by the total expected savings over a five-year period divided by the cost and the support services.
2.The Wish List
▪Include the equipment that is necessary to install the new process. State the effect this addition would have on the company’s productivity and competitive position in the marketplace.
▪In a separate proposal, list the cost and effects of upgrades to existing equipment or processes.
3.Alternatives
A well-written proposal should detail the alternatives to buying a new process and if possible its disadvantages:
▪Upgrading existing equipment may not meet the increases foreseen in demand or product quality.
▪Using outside suppliers to provide the technology required.
•What did this service cost from outside suppliers over the past few years?
•Was the service always available when required and were delivery dates met?
•Would it be less expensive and more convenient to have the equipment in house?
4.Case Histories
In any request for a large capital outlay, it is important to have answers to the following:
▪What is the technology and what does it do? A videotape from the vendor of the technology could be useful in informing those not familiar with the technology.
▪How many competitors are using this advanced technology; document their published results? This information may be available from equipment manufacturers or suppliers.
Fig. 1-2-7 The factors that a justification plan should include to ensure success. (Courtesy Kelmar Associates)
When introducing advanced technology, keep in mind not only its immediate effect on a particular area of the manufacturing operation, but the potential ripple effect that improve efficiency of both upstream and downstream applications.
▪What is the technology’s effect on productivity, production flexibility, responsiveness to market changes, product quality and reliability, human resources, inventory levels, and customer satisfaction?
CASE HISTORIES:
TOOLS AND ACCESSORIES
Major improvements in productivity and product quality can be affected through the use of advanced technology in tools and accessories, manufacturing processes, and machine tools and manufacturing systems. The following examples of each category show the experiences of firms that implemented them.
Superabrasive Cutting Tools
The cost model shown in Table 1-2-1 is a comprehensive method of analyzing critical cost variables associated with a particular machining application. To illustrate how this model can be applied, annual production data from an automotive engine plant has been entered into the applicable sections of the machining cost model. This model reflects the machining costs of a gray cast iron cylinder boring application comparing silicon nitride (SiN) inserts with polycrystalline cubic boron nitride (PCBN) inserts. The use of PCBN tools in gray cast iron machining is limited to certain grades, depending upon the microstructure of the cast iron.
Total Machining Cost Evaluation
Application: Gray Cast Iron Cylinder Boring
An engine cylinder block is being semi-finished and finish bored dry using a single-point tool boring head. After the semi-finishing pass is completed, a single tool is extended from the boring head by an actuator; the finishing pass is completed as the head is extracted from the cylinder bore. A total of twelve inserts are required to complete this operation on the gray cast iron V-6 engine.
▪Insert - SNG-432 (15° X .004 in. chamfer)
▪Speed - 2600 SFM
▪Feed - .014 in./rev.
Table 1-2-1 Machining cost model. (Courtesy GE Superabrasives)
▪DOC - .015 in. semifinish
▪DOC - .005 in. finish
The average bore cylindricity (roundness) obtained with the SiN tooling was .0006 in. When the change was made to PCBN inserts, average bore cylindricity was reduced to .0004 in. Since PCBN inserts conduct heat away from the workpiece, less heat shrinkage occurred in the bores, resulting in an improvement in cylinder honing.
Tool Cost (Cost of tooling only), Fig. 1-2-8. This is the cost often used as the major criterion for determining the economic justification for tool selection. Regrinding is also important, because it can bring the tool cost/part down significantly in some applications. The nature of this cylinder boring application did not allow the regrinding of inserts. As seen from the model, the price per part is essentially the same despite the significantly higher initial price of the PCBN tool.
Fig. 1-2-8 Tool cost factors - Machining. (Courtesy GE Superabrasives)
On-Line Labor Cost (Cost of operator to run machine), Fig. 1-2-9. This cost in some cases will also include setup because it is done by the same person. On a per part basis, the cost model shows a reduction in cost when PCBN is used due to the increase in productivity on this cylinder boring application.
Fig. 1-2-9 On-Line labor cost factors - Machining. (Courtesy GE Superabrasives)
Tool Change Cost (Labor cost required to change tools), Fig. 1-2-10. This may be the same as on-line labor cost depending on who is authorized to change tools. In the cylinder boring application, PCBN requires a reduced number of tool changes, one every 12.5 shifts, compared to two per shift with SiN. Thus the tool change cost is significantly reduced.
Fig. 1-2-10 Tool change cost factors – Machining. (Courtesy GE Superabrasives)
Scrap Cost (Cost of scrapped parts), Fig. 1-2-11. PCBN produces a tighter part tolerance, resulting in a reduced scrap rate that is portrayed as a 61% scrap cost reduction shown in the model.
Fig. 1-2-11 Scrap cost factors – Machining. (Courtesy GE Superabrasives)
Setup Cost, Fig. 1-2-12, – This is the cost for labor to index tooling or prepare cutter for use, before it is actually delivered to the line. Since PCBN requires fewer tool changes, setup cost can be reduced with respect to conventional tooling. This model involves evaluating a cylinder boring application where no setup was required, however in some applications this cost can be significant.
Fig. 1-2-12 Setup cost factors – Machining. (Courtesy GE Superabrasives)
Rework Cost, Fig. 1-2-13, – The cost of reworking parts that do not meet specifications the first time they are machined. This cost will also be reduced due to the higher quality of parts produced by the PCBN machining process. The cylinder boring application however did not have statistics for this cost, but a reduction in scrap parts indicates a probable reduction in rework parts.
Fig. 1-2-13 Rework cost factors – Machining. (Courtesy GE Superabrasives)
Inspection Cost, Fig. 1-2-14, - The cost of labor for the inspection of parts to meet specifications. Once again with the tighter part tolerance that a PCBN tool produces, a higher confidence in product quality can be achieved, thus reducing inspection time. The inspection procedure for the cylinder boring application did not change despite the significant improvement in process capability. Consequently, no inspection cost savings have been realized to date.
Fig. 1-2-14 Inspection cost factors – Machining. (Courtesy GE Superabrasives)
Inventory Cost, Fig. 1-2-15, – The cost of carrying raw material and in-process parts before and/or after machining. This number is based on the scrap rate and predicted production rate. Since the scrap rate will be reduced using PCBN tools, the number of parts kept in inventory should be reduced accordingly. Increased productivity, however, may cause this cost to increase. No information on this cost was available for the cylinder boring application.
Fig. 1-2-15 Inventory cost factors – Machining. (Courtesy GE Superabrasives)
Total Machining Cost, Fig. 1-2-16, - This yields total cost of machining and is the sum of the above costs on a per part basis for the cylinder boring application. As can be seen from the results above, the PCBN tool reduces cost $.44 per block, or 38%. Using a traditional machining cost analysis that looks only at tooling cost per part, the silicon nitride and PCBN inserts appear equal, leading the engineer to uninformed go/no go decisions. In reality, they are very different. Certain costs were not attainable for this cost model, and this may be true for many applications. The purpose of the model is to include all relevant costs for any machining process. It is the responsibility of the engineer to determine which costs are pertinent to the particular application.
Fig. 1-2-16 Total machining cost/part. (Courtesy GE Superabrasives)
The full effect which superabrasives have on this operation can be appreciated more fully by annualizing expendable tool costs and comparing this to annualized savings.
The final bottom line on this application is that the actual total cost of expendable tools decreased very slightly and created a total production system cost reduction of 312,000 x $.44 X $137,000/year.
Total Grinding Cost Evaluation
As in the machining cost analysis, present grinding evaluations do not properly portray the potential savings associated with superabrasive grinding programs. Let’s take a simple example such as regrinding high-speed steel end mills. One-half inch end mills made of M-4 may take up to 15 minutes each to regrind with a conventional wheel costing about $10. These same tools may be reconditioned with a $200 CBN wheel in 5 to 8 minutes. The CBN wheel typically reconditions 20 to 50 times as many tools as the conventional wheel it replaces.
Table 1-2-2 Grinding cost model. (Courtesy GE Superabrasives)
In a traditional cost analysis, the CBN wheel is anywhere from break even to an actual cost advantage. The real advantage of the CBN wheel is in productivity and quality. The tools reground with CBN are more accurate and have retained surface integrity due to the cool grinding characteristics of CBN wheels. Thus, the tools ground with CBN may stay on the milling machine and produce twice as many operations or parts before it needs reconditioning.
To develop a more consistent and complete cost evaluation, a grinding model shown in Table 1-2-2 has been established. Manufacturing economic equations are used that were specially adapted to the grinding process. Process parameters used in the equations include tool life, machine and overhead costs, dressing roll costs, scrap, coolant and many other factors peculiar to grinding.
Application: Superalloy High Pressure Turbine Nozzle Assembly Internal Diameter (ID) Grinding
An application from the aerospace industry has been selected to demonstrate the effectiveness of the grinding cost model. The ID creep feed grinding of a gas turbine aircraft engine component is used to compare a conventional aluminum oxide (Al2O3) wheel and a vitrified bond CBN wheel. This qualification was performed on a 34 in. diameter high-pressure turbine nozzle shroud assembly made of a superalloy material.
Machine tool: Vertical Spindle CNC Grinder
Wheel speed: 7000 SFM
Table speed: 7 in./min.
Stock removal: .065 in./side
Operation Manpower Cost (Cost required for labor to operate the grinding machines), Fig. 1-2-17. This cost is dependent on labor rate and cycle time per part. In the model, CBN increases productivity from .67 to .76 parts per shift, thus decreasing labor cost by $123.85 per part.
Fig. 1-2-17 Operation manpower cost factors – Grinding. (Courtesy GE Superabrasives)
Wheel Cost (Cost of the grinding wheels), Fig. 1-2-18. The initial investment in a vitrified bond CBN wheel is 140% of that of the Al203 wheel. In many industries, this is the only cost used to calculate abrasive cost. The model shows nearly three times the wheel cost/part for CBN, however, productivity increased 13%. The rest of the model shows that there are other important factors that must be considered.
Fig. 1-2-18 Wheel cost factors – Grinding. (Courtesy GE Superabrasives)
Wheel Change Cost (Cost of labor to change grinding wheels), Fig. 1-2-19. Wheels containing CBN abrasive last much longer than aluminum oxide and require fewer wheel changes. CBN achieved a 98% wheel change cost reduction over Al203 in this application.
Fig. 1-2-19 Wheel change cost factors – Grinding. (Courtesy GE Superabrasives)
Dressing Roll Cost (Cost of the dressing roll used), Fig. 1-2-20. Vitrified bond CBN wheels require less frequent dressing than conventional grinding wheels; consequently, dressing rolls used in the CBN process outlast those used for Al203 grinding. This results in a lower cost per part, as shown by the 58% decrease in roller cost/part in the model.
Fig. 1-2-20 Dressing roll cost factors – Grinding. (Courtesy GE Superabrasives)
Dressing Roll Change Cost (Cost of labor to change dressing wheels), Fig. 1-2-21. Since fewer rolls are required with CBN, this cost will also decrease. Although in this application the cost savings are insignificant, in some applications greater dresser roll change cost savings can be achieved.
Fig. 1-2-21 Dressing roll cost factors – Grinding. (Courtesy GE Superabrasives)
Maintenance Labor Cost (Cost of maintenance performed on the machine during downtime), Fig. 1-2-22. Grinding machines equipped with CBN wheels require less frequent coolant changes and therefore downtime to change coolant is decreased. This cost also includes downtime for filter changes, machine maintenance and time required topping off the coolant tanks. The model reflects a 41% reduction in this cost.
Fig. 1-2-22 Maintenance labor cost factors – Grinding. (Courtesy GE Superabrasives)
Scrap Cost (Cost of scrapped parts), Fig. 1-2-23. A CBN grinding application produces a higher part-to-part consistency, resulting in a reduction in scrap cost. This is illustrated by the $391.80 per part savings or an 89% scrap reduction offered by the CBN wheel.
Fig. 1-2-23 Scrap cost factors – Grinding. (Courtesy GE Superabrasives)
Coolant Cost (Cost of keeping grinder supplied with coolant, free from excess swarf contaminant), Fig. 1-2-24. Wheels containing CBN abrasive require less dressing than conventional wheels resulting in less swarf contamination from the grinding wheel. This results in longer coolant life due to reduced amounts of swarf entering the system.
Fig. 1-2-24 Coolant cost factors – Grinding. (Courtesy GE Superabrasives)
Filter Cost (Cost of filter paper used in the coolant system), Fig. 1-2-25. This cost is also reduced due to less dressing of the CBN wheel, and a consequent reduction in swarf contamination due to the wheel. The model shows 56% savings per part as a result of using CBN abrasive.
Fig. 1-2-25 Filter cost factors – Grinding. (Courtesy GE Superabrasives)
Coolant Disposal Cost (Cost of disposing the used coolant), Fig. 1-2-26. In the model, CBN grinding cuts coolant replacements in half. In some cases this is a minor cost, in others it can be significant depending on the coolant type being used.
Fig. 1-2-26 Coolant disposal cost factors – Grinding. (Courtesy GE Superabrasives)
Inspection Cost (Cost related to labor of inspecting part quality), Fig. 1-2-27. Through a more consistent grinding process, a higher confidence level in product quality can be achieved thereby reducing inspection time. The model shows that inspection time was cut 36% when CBN was implemented.
Fig. 1-2-27 Inspection cost factors – Grinding. (GE Superabrasives)
Inventory Cost (Cost of carrying raw material and in process parts before and/or after grinding), Fig. 1-2-28. This number is based on the scrap rate and the predicted production rate. Since the scrap rate is reduced using CBN grinding wheels, the number of parts kept in inventory should also be reduced. No information on this cost was available for this high-pressure turbine nozzle assembly grinding application.
Fig. 1-2-28 Inventory cost factors – Grinding. (Courtesy GE Superabrasives)
Total Grinding Cost (The summation of all the significant measurable costs on a per part basis), Fig. 1-2-29. The model illustrates that despite a three times greater wheel cost per part for a vitrified bond CBN wheel, the overall cost savings is $569.00 per part or a 36% reduction in total cost; this is partially due to a 13% increase in productivity.
Fig. 1-2-29 Total grinding costs. (Courtesy GE Superabrasives)
The operation is best evaluated on an annualized basis, comparing expendable grinding wheel costs to yearly savings in order to understand the effect that superabrasives have on the process.
This example demonstrates the inadequacies of the present costing methods by showing the need for a more thorough cost evaluation by process engineers. Conversion to CBN resulted in a total production system cost reduction of 336 × $569.40 = $191,318.40/year.
CONCLUSION
Using these proposed models, the process engineer can obtain a much clearer picture of the true cost of a machining or grinding operation. A total cost program should be used as a management tool to help identify process problems, reveal where change is necessary, and monitor continuous improvement. A structured data collection system must be in place to use these models successfully. The cost savings potential of such a model, however, far outweighs the effort required to use it.
The next time the corporate finance department argues against the conversion to a superabrasive process, manufacturing engineers should point out the inadequacy of the analysis. A thorough cost evaluation will demonstrate that the intangible benefits can have a major effect on a company’s profitability. The manufacturing plant of the late 1990s and early 2000s will redefine traditional cost accounting practices to recognize the many benefits of superabrasive processes in an environment of Advanced Manufacturing Technologies.
CASE HISTORIES – MANUFACTURING PROCESSES
Rapid Prototyping
In the automotive industry, many models and prototypes (models) are required before actual production can begin. Models are used to visualize designs, check engineering changes, check that parts are correct and fit properly, and sometimes check that they function properly. Automotive manufacturers have found that rapid prototyping can dramatically reduce model-making time and costs. The following examples show how one advanced technology can benefit a company:
▪A cylinder head flow box that normally took 320 hours to fabricate at a cost of $10,000 was produced by rapid prototyping in 80 hours.
▪An “A” pillar blocker was created by stereolithography from the surface data and from that a tool was made to create the mold. The savings in CAD and design time were $30,000.
▪A stereolithography intake manifold model was used to test the flow of gasses through the chambers. Three model changes were not necessary because of the accuracy of the prototype.
▪It was estimated that one automotive manufacturer saved $5 to 10 million in a two-year period using various rapid prototyping processes.
CAD/CAM
Simmonds Precision Products, a manufacturer of products for industrial and aerospace customers, implemented a CAD/CAM system to improve manufacturing productivity, reduce manufacturing costs, and improve product quality. The implementation plan included training a full-time centralized design group. The product selected for the first application was a printed circuit (PC) design with the following results:
▪PC design savings in the first year were $154,000; in 20 months, there was a total savings of $498,000 along with a 100% reduction in cycle time for the production of designs.
▪Production time for graphics was reduced from 2 to 6 hours to 15 to 60 minutes with a significant reduction in errors.
▪Direct labor reduction in engineering was reduced by 27%
CASE HISTORIES (MACHINE TOOLS & FLEXIBLE MANUFACTURING SYSTEMS)
▪General Electric Company, Erie Locomotive, Erie, PA, installed a $300 million FMS facility for the machining of locomotive motor frames. In two years the company increased its market share from 20 to 25% to nearly 50%.
▪Yamazaki Machinery Company, Japan, installed an $18 million FMS system that resulted in the reduction of machines required for production from 68 to 18; employees from 215 to 12; floor space from 103,000 to 30,000; and processing time from 35 days to 1.5 days. After two years, the company had saved $6.9 million in production costs.
▪Allen Bradley’s $15 million “World Contactor Line” can produce more than 125 variations of NEMA and IEC contactors at a rate of 600 per hour. This system is producing a 75% return on assets while allowing the product to compete effectively on the world market.
For more information on ECONOMICS OF ADVANCED MANUFACTURING TECHNOLOGY see Acknowledgement section for the Websites of an industry/organization listed.
