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1 May 2002

‘Build to order’ marching in

By Jim Strothman

Multiple manufacturers target cost savings, happier customers

Say “make to order” or “build to order,” and Dell Computer immediately comes to many minds. Credit Dell’s marketing, however, because many other manufacturers are also aboard the build-to-order bandwagon.

Some also make computers to order, while others turn out a wide variety of products, from semiconductor equipment to windows (the glass kind, not Microsoft) to automobiles to huge, complex electrical generators.

Generator-making giant GE Power Systems—which reportedly has a three-year order backlog, thanks in part to nervousness caused by last summer’s California brownouts—is currently installing what will arguably be the largest manufacturing execution system (MES) in the world. GE’s goal is to have a near-paperless, digital-based, build-to-order system at its approximately 20 plants worldwide.

“Jack Welsh’s parting gift was allocating a lot of money to become digitized,” said Ian Stone, Cimnet Inc. executive vice president, referring to the recently retired GE chief executive officer.

Robesonia, Pa.–based Cimnet has already installed its MES software at about a half-dozen GE manufacturing centers, including one plant the size of 40 football fields. Thousands of GE Power Systems’ MES users daily deal with untold thousands of generator parts. Each generator comes with scores of options, so each is custom made, or built to order.

Properly planned and installed, MESs eliminate cumbersome and error-prone paperwork and significantly improve order-to-cash time.

In the paperless make-to-order MES nirvana, a new shop order, or modification, is instantly scheduled where it belongs in the queue. Inventory needs are electronically communicated to the entire supply chain via an MES/enterprise resource planning (ERP) interface. Management receives real-time status reports about shop orders, operators, and manufacturing equipment and processes.

Time-consuming paper “walk arounds” are eliminated, where humans hand edit schedules, shop orders, status checks, and changes, for example, then hand carry them six or seven times a shift to different operators around the factory floor.

Forrester Research predicted the auto industry will adopt much larger build-to-order car manufacturing and sales approaches during the next three or four years. Automakers are developing build-to-order information platforms to connect front-end sales processes with back-end manufacturing and logistics, the market research firm said.

Forrester estimated the auto industry loses up to 2% of sales—a cool $7 billion per year—when potential customers walk away rather than buy “off-the-lot” cars or face the arduous configuration process and long lead times of factory-ordered vehicles.

“With the ability to build vehicles to specific customer orders, the auto industry will overhaul the manufacturing mind-set to emphasize customer service and satisfaction over inventory, and profits over volume,” said W. Daniel Garretson, Forrester senior analyst. Forrester predicted that by 2010, some 20% of vehicles will be built to order.

Using make-to-order, Java-based software technology from Skyva in Medford, Mass., and ERP vendor AP AG, Audi quattro GmbH plants in Germany already handle customized Audi car orders. quattro takes work-in-progress orders from Audi Motors and adds specially ordered sporty bells and whistles such as sunroofs, special tires, or suspension systems.

Jay Truchon, Skyva director of end-market solutions, said the Skyva-AP AG package increased quattro’s planning accuracy; accommodated changes in real time; lowered production costs; improved allocating resources, production equipment, and materials; and sped delivery.

Skyva technology is also part of make-to-order software sold by ABB to process industries such as paper, steel, and minerals (see sidebar). ABB owns 53% of Skyva.

Acma Computers Inc., like Dell, makes and sells custom computer systems directly to corporate and government accounts nationwide. Headquartered in Fremont, Calif., Acma started out using homegrown, paper-based, shop-floor tracking, performance, and measuring systems.

“No one—not customers, salespeople, production managers, or executives—had real-time visibility into the status of unit-level components of a customer’s order,” acknowledged Allen Lee, Acma president.

“When a customer requested a change, we had to go through sales, executives, and production managers to see where the unit was, determine whether a change was acceptable, and then go back through the whole chain. In addition, Acma had no real-time metrics for tracking delivery, production, and quality information,” Lee recalled. “Our people were spending over 10 man-hours a day adjusting production schedules and creating performance charts that were always old news.”

Seeking to eliminate bottlenecks, Acma installed Datasweep’s Web-centric MES architecture on Microsoft’s DNA for Manufacturing platform, using Microsoft’s SQL 7.0 database running on a 450-megahertz (MHz), single-CPU Pentium II server. It installed Datasweep’s light-Java client software on Windows NT 4.0 233-MHz client machines with Pentium processors.

Lee said measurable return on investment included a 78% to 96% increase in on-time delivery; a 12% improvement in final test time—a traditional bottleneck in electronics assembly plants; an improving final assembly first-pass yield from 90% to 97%; and a 50% reduction in new operator training time. In addition, improved scheduling and visibility into parts resulted in a 21% reduction in inventory. Acma also entirely eliminated the “paper traveler,” resulting in a substantial savings in production and maintenance overhead, Lee said.

Semiconductor equipment manufacturing giant KLA-Tencor Corp., another Datasweep user, faced a similar situation.

“A manufacturing engineer using a paper-based shop floor system could spend days or weeks compiling and analyzing production information about a complex quality problem to decide whether to make a supplier, product, or process change—and even more time to execute that change in the supply chain and the field,” said William R. Bonnar, a KLA-Tencore division vice president of operations.

The semiconductor equipment maker credits its internal MES application with reducing troubleshooting cycle time by 40% and expects to cut recurring quality issues by 25% to 50%.

Arun Ramakumar, Datasweep senior product marketing manager, said the company’s Web-based Advantage product accesses orders from the ERP system. “Basically, execution of the work order is what Datasweep does. We insure it’s built to specs; insure you’re able to ship the work order out in a specific time, on the promised date; and insure checks and balances are in place.”

Advantage’s Process Designer module enables manufacturers to design the manufacturing route: physical production lines, equipment, work centers, quality gates, and test processes. It tracks single-unit information, recording in detail all parts that go into a built-to-order product and when and who installed them. Meanwhile, manufacturing management, suppliers, and customers have real-time visibility into the order’s status, with appropriate levels of security.

Electronics manufacturing giant Flextronics has about 1,000 Datasweep Web-based MES users worldwide assembling medical, consumer, and telecommunications products. Datasweep and Cimnet both claim the same large build-to-order, custom window manufacturer as a customer.

At National Manufacturing Week in Chicago in March, Cimnet unveiled its next-generation MES. Named Factelligence, the product has been in development for more than three years. It features 12 MES modules that plug in to a core extensible markup language–based data conduit to provide specific functionality for specific verticals.

Each module provides its own MES rules, configuration tools, and real-time metrics, and there’s a Web-based manager’s portal and other user interfaces for operators, supervisors, and system administrators. IC

Behind the byline

Jim Strothman is associate editor, InTech.