Most of these parts are sourced from various manufacturers before being assembled onto the body-in-white. In order to make a car, all of these parts must be sourced from within and outside a country in varying quantities. Thus, producing thousands of cars every month requires meticulous deliberation, planning and execution.

The complex process needs to be simplified to enhance accuracy and repeatability. A bill of materials is a tool that helps us achieve just that. This article will explore the concept of a bill of materials, its contents, types, and its role in simplifying complex processes within various departments in different industries.

What Is a Bill of Materials?

A Bill of Materials (BOM) is a product-specific document that provides a detailed breakdown of a product into assemblies and sub-assemblies. It serves as a comprehensive blueprint, outlining the various components involved in the manufacturing process. Think of it as a grocery list for making your assembly.

A bill of materials is an important and useful document, it serves as the foundation for production planning systems. As the number of parts in a product increases, it becomes increasingly difficult to manage the availability of all the components in sufficient quantities for the assembly process. The unavailability of just one part can halt the entire assembly line, costing the company thousands of dollars in lost productivity.

To prevent this, companies use a bill of materials to plan and track component purchases, optimise inventory levels and reduce waste. When used correctly, it enables a more systematic and deliberate process, minimising unplanned downtime and errors while ensuring operations run at the lowest possible cost.

What Is Included in a Bill of Materials?

A bill of materials can take on different forms. It has different components depending on the department to which it belongs.

For instance, a manufacturing bill of materials includes details, such as the product code, part name and number, quantity, description, colour, size, and the process in which it will be used to make the final product.

A sales bill of materials includes sales-relevant information, such as product prices, shipping details, part weight and dimensions, payment terms, tax rates, etc.

Thus, the BOM may include all the information that a department needs for smooth operations.

Bill of Materials BOM

Bill of Materials (BOM) Structure

A Bill of Materials (BOM) follows a standard structure. At the top is the finished product, which branches into sub-assemblies and their individual components as the hierarchy progresses downward. The BOM hierarchy resembles a pyramid, with the simplest components, such as fasteners, forming the base. These components combine with others at successive levels, ultimately culminating in the finished product at the apex.

Some BOM layouts may also include orthographic projections of a product, with all components tabulated at the bottom along with their details.

The structure of a bill of materials may also change depending on whether it is a single-level BOM or multi-level BOM:

• A single-level BOM places the finished product at the top, with individual components listed just beneath it. There are no sub-assemblies.
• A multi-level BOM is required for parts that have a high number of components and need more than one tier of hierarchy. The product’s assembly is broken down into sub-assemblies, tier after tier, until the individual components are reached.

A comprehensive bill of materials should include the following information:

Product or Assembly Name – Identifies the product or assembly, which is especially important for companies managing multiple product lines.

Part Name – Identifies the part and includes relevant details associated with it.

Part Number – A unique numeric or alphanumeric identifier is assigned to each part to ensure easy identification. A product may include several similar parts that vary in size or shape. For instance, bolts, which are commonly used as fasteners, can be differentiated by assigning a unique identifier to each type. This approach allows for more effective tracking and management of availability and usage.

Description – Prevents confusion between similar parts by providing any unique information about a part that may be overlooked at first glance. It may include details, such as colour or dimensions.

Quantity – Indicates the number of components in the final product. This helps to plan purchasing and manufacturing activities. Different components may have different units of measurement. The unit may be located in an adjacent column or in the quantity column itself.

BOM Level – A multi-level BOM consists of several levels. The Bill of Materials (BOM) also specifies the level for every component based on its position in the BOM hierarchy.

Manufacturer Details – Including manufacturer details is essential when a product consists of components or sub-assemblies sourced from multiple suppliers.

Part Phase – The term “part phase” refers to the stage a part is currently in. For a New Product Introduction (NPI) part, the phase might be labeled as “unreleased” or “in design.” For a finalised part that has reached the production stage and is on the machine shop floor, may be marked as “in production.” The part phase may sometimes also include the version of the parts, as they evolve through optimisations.

Alternate Part – A column may be added to the BOM to inform the reader of alternative parts to be used if the original part is unavailable.

Component Cost – The component’s unit cost may also be mentioned alongside their name in some bills of materials. This helps to understand the cost weightage of each component.

Procurement Type – The bill of materials may also specify the procurement method for a particular component. For items readily available in the market, the BOM may refer to them as “off-the-shelf”. custom-made parts, on the other hand, will be referred to as “made-to-specification”. This distinction helps us understand that certain parts may have longer lead times than others, enabling the team to plan manufacturing and purchasing activities accordingly.

Priority Analysis – The priority analysis column indicates which components or parts have a higher priority, typically requiring greater monetary investments or longer lead times. This helps to distinguish between critical parts and common parts.

BOM Notes & Comments – A Bill of Materials (BOM) also includes a notes/comments section for documenting any changes as the project progresses. For clarity, this section may also include diagrams and assemblies of relevant parts.

Types of Bills of Materials

Bills of materials are widely used in most product-based companies.

Although BOMs originated in manufacturing, they have gradually transitioned to other organisational functions. Today, in addition to a Manufacturing BOM, there are various types of bills of materials: Sales BOM, Engineering BOM, Production BOM, Purchasing BOM, Service BOM, and CAD BOM.

Each Bill of Materials (BOM) plays a crucial role in product development, and all of these BOMs are essential for the relevant department to support its functions and processes. Let’s take a look at two of the most important bills of materials to understand what they offer.

Engineering BOM

The engineering department prepares the Engineering Bill of Materials (EBOM) to define their product. It has a hierarchical structure with detailed specifications of each component, such as part number and tolerances. The EBOM is usually created using Computer-Aided Design (CAD) or Electronic Design Automation (EDA) software.

An EBOM covers only engineering concerns, such as form, fit and function. It does not concern itself with how parts are manufactured or procured. The EBOM is one of the first BOMs created in product development.

Manufacturing BOM

The Manufacturing Bill of Materials (MBOM) is created by the manufacturing team to build the product. Unlike the EBOM, it has a more visual format, with diagrams and/or flowcharts. Since manufacturing can only begin once the design is finalised, the Manufacturing BOMs are created after EBOMs.

The manufacturing BOM focuses on how a product is made. It contains detailed information about the manufacturing process, tooling, work instructions, and assembly stages.

Information Flow Between BOMs

All the different BOMs mentioned in the previous section are interconnected. Information flows from the top to the bottom through all the different bills of materials.

At the start of product development, only the requirements and specifications of the part are available. Using this information, an early bill of materials is generated, listing the assemblies and parts required for the final product.

The engineering department is the end user of the early BOM, as it helps them get a head start. They use the information from the early BOM to generate the Engineering BOM. The Engineering BOM is more comprehensive, benefiting departments like manufacturing, purchasing and servicing.

Each department uses the Engineering BOM to generate its own BOMs: Manufacturing BOM, Purchasing BOM and Service BOM. For example, if the Engineering BOM specifies that a part requires 6 M12 bolts, the purchasing department would order 600 M12 screws if the company plans to manufacture 100 finished products. So, in a way, the supporting departments are the actual consumers of the Engineering BOM.

In complex industries, such as the automotive and aerospace, all bills of materials play an important role. The components that form the product may be manufactured in-house or sourced from Tier 1, Tier 2 and Tier 3 suppliers. Parallel products may be manufactured simultaneously. Some components may be common to multiple products, while others may be unique to each product.

Effective optimisation of inventory and supply chain management requires a purchasing bill of materials that serves as a reference point for all stakeholders. This ensures alignment and prevents both shortages and wastage. However, not all types of BOMs are necessary for every company. Smaller companies, that do not have high purchasing requirements, can operate without a purchasing BOM.

How to Create a Bill of Materials

A bill of materials needs to be as comprehensive as possible without including any unnecessary information. Let’s break down the process of creating a general bill of materials when starting from scratch:

Step 1: Understand the Product

Start by defining the product and the goal of the bill of materials. By understanding the objective, irrelevant information can be filtered out. Pay attention to the design, specifications and all product documentation.

Step 2: List All Parts

Break the product down into its sub-assemblies, components and materials. Try to delve as deep as possible to identify each component separately.

Step 3: Identify Part Numbers and Other Part-Specific Information

In this step, gather specific information about each part of the Bill of Materials (BOM). This could be the manufacturer’s part number, description, part colour, dimensions, weight or any other relevant measurement. You may want to include part revision numbers to track changes over time.

Step 4: Create the Bill of Materials (BOM) Structure

The product determines the format. When dealing with a product with just a few components, a single-level BOM is efficient. For complex parts, a multi-level BOM would be more appropriate. Choose the relevant information gathered in Step 3 and organise the components in a hierarchical structure. The individual components are at the bottom. Moving up, these components are combined to form sub-assemblies that eventually lead to the final product. The final structure should look like a tree root or a pyramid.

Additional Tips

1. Include sufficient visual aids, such as drawings and diagrams.

2. Mention the manufacturers and suppliers of the different components in the BOM.

3. Manual bills of materials are prone to errors and difficult to modify. Invest in good BOM software for a better experience.

4. For clarity and consistency, use standard formats, terms and units.

Optimising a Bill of Materials

If you already have a BOM, you may be looking for tips to improve it. A bill of materials is an excellent tool, but it needs consistent maintenance. The following tips can help you optimise your current BOM to ensure you have the best version at all times.

Review at Regular Intervals

The most important feature of a BOM is that it accurately represents a process. However, product changes and updates occur regularly in most products. Therefore, BOMs have to be reviewed and updated regularly to reflect these changes correctly.

Cross-Functional Review

Discussing BOM among the various departments can reveal any missed information and how it could be included. This would make the BOM more accurate and complete than before.

Add Visual Aids

Add visual aids where necessary, such as images, diagrams and drawings, to enhance clarity and understanding of complex assemblies.

Integrate with Other Systems

Integrating the BOM with other systems, such as ERP and PLM, can make editing easier and allow better version control.

Benefits of Using a Bill of Materials

As pointed out in previous sections, a bill of materials serves various functions in different departments. Naturally, it also provides different benefits to each of them. In this section, you’ll find the benefits offered by the two most common bills of materials: the Engineering BOM and the Manufacturing BOM.

Benefits of an Engineering BOM (EBOM)

The Engineering BOM provides immense value not only to the engineering department but also to departments that support engineering, such as sales, purchasing and manufacturing. Investing in this tool helps engineering departments enhance efficiency and achieve their objectives. Let’s take a look at some specific advantages that an EBOM provides:

Improved Product Quality – The engineering bill of materials helps to enhance product quality over time by reinforcing design practices, minimising errors and reducing the need for rework.

Design Accuracy – Having a standardised EBOM enables the team to have a clear understanding of the various components, their design specifications and functionality. This enhances overall design accuracy.

Avoiding Downstream Problems – The team creates the EBOM during the design phase. This allows the engineers to identify and resolve potential issues well in advance, preventing costly corrections downstream.

Effective Communication – A picture speaks a thousand words. An EBOM is a comprehensive document that systematically lays out the form, fit and function of the proposed product and its components. This enables effective communication among the interdisciplinary teams involved in the product development process.

Version Control – A product may undergo many changes throughout the production process. These changes need to be tracked, documented and communicated to all stakeholders as soon as they are finalised. An EBOM with version control capabilities allows us to manage changes during the design phase and ensures that everyone has access to the most up-to-date and accurate information.

Synergy with PLM Software – The engineering bill of materials can be integrated with Product Lifecycle Management (PLM) software to oversee product data throughout its lifecycle. The integration is fast and seamless, offering the benefits of centralisation.

Failure Cause Identification – An accurate BOM helps identify the cause of product failure and facilitates the replacement of faulty components or materials.

Benefits of a Manufacturing BOM (MBOM)

The Manufacturing BOM serves as the central document for the manufacturing team. It is derived from the Engineering BOM and contains all the information relevant to manufacturing the product. Having an exhaustive and well-updated Manufacturing Bill of Materials (MBOM) provides the following advantages.

Improved Production Planning – The MBOM contains a comprehensive list of components along with all the required specifications and essential raw materials needed for manufacturing. This helps in accurate resource allocation and production planning. The BOM is also a prerequisite for designing Enterprise Resource Planning (ERP) and Materials Requirement Planning (MRP) systems.

Errors Minimised – Most errors in a manufacturing setup occur during the manufacturing and assembly of parts. Having a BOM standardises these manufacturing processes for all the concerned employees and reduces the chances of errors.

Improved Inventory Management – A clear and well-structured BOM helps maintain the appropriate inventory levels for production needs. It enables the anticipation of demand and ensures timely fulfillment while minimising logistics costs. This approach prevents common inventory issues such as stockouts, overstocking and backorders, as well as their cascading effects, including lost productivity, production delays and downtime.

Time Savings – Having a centralised document containing all the part details leads to time savings across the board. Details, such as part numbers, part colours and the fabrication process in which they will be used, can be easily revised by referring to the MBOM in case of any confusion. Items can be located within minutes in the store. Small time savings add up and improve the overall productivity and efficiency of the manufacturing operations.

Budget Control – An MBOM can reduce waste and improve time management, ultimately helping an organisation maintain control over budget.

Conclusion

All in all, a bill of materials is an essential tool for any company that wants to improve its production efficiency. A good BOM, through specifications, quantities and component details, improves collaboration among the various teams and streamlines workflows.

The benefits reach beyond the shop floor. A well-structured BOM allows to control inventory, production cost and product quality. A direct beneficial impact can seen in the accuracy and efficiency of the setup, and an indirect impact appears in customer satisfaction.

The post Bill of Materials – What It Is, How It Works & Its Benefits appeared first on Fractory.

Businesses and projects of all sizes face various risks, and being prepared for them is crucial to meeting the initially set target cost and, ultimately, for business success. The risk assessment matrix is a powerful tool that helps to navigate these uncertainties.

What Is a Risk Assessment Matrix?

A Risk Assessment Matrix, also known as a Risk Matrix or Risk Control Matrix, is a visual tool widely used in project management and various other fields. It acts as a grid-like chart to assess potential project risks based on two key criteria:

• Risk probability (likelihood): How likely is the risk to happen? (very likely, likely, possible, unlikely, very unlikely)

• Risk impact (severity): How bad could the consequences be? (very high, high, moderate, low, very low)

Plotting each identified risk on the matrix, based on its probability and impact, provides a clear view of potential threats. This allows to understand the different types of risks, focus on the ones that demand the most attention during project planning, determine relevant actions for each identified risk to mitigate or eliminate its impact, as well as visualise the relative importance of different risks, facilitating informed decision-making.

What Are the Types of Risk Assessment Matrix?

While the traditional risk matrix focuses on likelihood and impact, there are different types of risk assessments that can be used alongside the matrix or independently. The best type of matrix for a project depends on its complexity, the level of detail required and the resources available.

1. Qualitative Risk Assessment: This is the most common type used with risk assessment matrices. It focuses on qualitative descriptions of likelihood and impact, such as “high,” “medium,” or “low.” It is a good starting point for understanding potential risks and prioritising them based on severity.

   Examples of use: Software development projects with a focus on identifying major functional or integration risks, initial risk assessment for a construction project.

2. Quantitative Risk Assessment: This type uses numerical values to assess both likelihood and impact. It involves data analysis, historical data, or even statistical models to assign more precise probabilities and impact scores. This approach is more detailed but requires more data and expertise.

   Examples of use: Large-scale infrastructure projects (bridges, tunnels), financial investments with potential market volatility, projects with strict safety regulations (e.g., chemical plants).

3. Generic Risk Assessment: This type focuses on identifying and assessing common risks that might be encountered across different projects or industries. It is a good starting point to get a general overview of potential issues but may not capture project-specific risks.

   Examples of use: Risk assessment for IT infrastructure upgrades in a company, initial risk identification for product development projects within a specific industry (e.g., medical devices).

4. Site-Specific Risk Assessment: This type focuses on identifying and assessing risks specific to a particular location, environment, or situation. It considers factors unique to that location and its potential impact on the project or business.

   Examples of use: Building a wind farm in a high-wind zone, a construction project in a region with frequent earthquakes, restoration project on a historical building.

5. Dynamic Risk Assessment: This type recognises that risks are not static. It is an ongoing process that monitors and updates the risk assessment as the project progresses and supplier relationships or business circumstances change. New risks might emerge, and the likelihood or impact of existing risks might evolve.

   Examples of use: Research and development projects with unknown outcomes, construction projects with phased deliveries and potential design changes, large-scale software development projects with ongoing feature updates.

Relationship to Risk Matrix: The risk matrix can be used with any of these types of assessments. Qualitative assessments are commonly used with the matrix due to their simplicity. Quantitative scores, if available, can also be incorporated into the matrix for a more precise evaluation. The matrix itself does not dictate the type of assessment but rather serves as a visual tool to present the results regardless of the method used to evaluate risks.

What Are the Common Risk Rating Scales?

Risk matrices typically use a square grid with scales for probability and impact. Common matrix sizes include:

• 3×3 Matrix (simple and efficient): This is the most basic and widely used format. It is a good choice for projects with a manageable number of risks or for projects where a quick and clear overview of major risk categories is needed.

• 4×4 Matrix (balancing detail and simplicity): Compared to a 3×3 matrix, this grid provides a more detailed view of risks by offering additional categories for both likelihood and impact. This allows for capturing a wider range of risks and their severity levels, making it well-suited for projects of moderate complexity.

• 5×5 Matrix (highly detailed and precise): This grid provides the most detailed risk assessment. It is best suited for complex projects with many potential risks and a need for precise risk assessment.

Key Differences: Risk matrices differ in various ways. Here’s the breakdown:

Choosing the right grid: The choice of grid size depends on various factors including the project’s complexity and the desired level of detail in evaluating risks. Here are the key factors to consider:

How Does a Risk Assessment Matrix Work?

1. Making a Risk Assessment Matrix

Risk matrix can be prepared as per the following main steps:

1. Pick your tools: Choose how to create your matrix (spreadsheet, project management software, pre-made matrix template).

2. Brainstorm risks: Identify all potential project roadblocks, internal and external.

3. Select risk approach: Pick a method (qualitative, quantitative, etc.) that fits your project’s complexity and resources. This also includes choosing the grid size (3×3, 4×4, or 5×5) for your matrix.

4. Rate risk impact & probability: Estimate how likely each risk is to occur (probability) and how badly it could impact your project (impact).

5. Plot & prioritise: Place each risk on the matrix based on its likelihood and impact. Focus on addressing high-probability, high-impact risks first.

2. Calculating Risk in the Matrix

There are two common methods used to calculate risk in a risk matrix:

1. Qualitative approach (simple ranking): This approach is favoured for its ease and speed. It uses descriptive terms like “high,” “medium,” or “low” for both likelihood and impact. The risk rating is then determined by combining these categories.

   Example: A risk with a “high” likelihood and “medium” impact might be ranked as “high-medium” or simply “high,” indicating a significant concern requiring attention.

2. Quantitative approach: This method offers more precision by assigning numerical values to both likelihood and impact. These values are then multiplied to generate a risk score.

   Example: Likelihood: “high” (assigned a value of 4), Impact: “severe” (assigned a value of 5). The risk score would be 4 x 5 = 20. This allows for an objective ranking of risks, with higher scores indicating greater threats. 

3. Using the Matrix

Once you have a populated risk matrix, you can use it to proactively manage project risks. Here are some key steps:

1. Prioritise: Focus on high-risk areas (red zones) in the matrix. These require immediate attention. Develop plans for moderate risks and document even low ones.

2. Develop strategies: Create plans to manage risks. This could involve:

   • Avoidance: Eliminate the risk entirely (e.g., find multiple material suppliers).

   • Mitigation: Reduce the risk’s impact (e.g., implement stricter quality control procedures).

   • Transference: Shift the risk to someone else (e.g., purchase insurance to cover delays caused by labour strikes).

   • Acceptance: Live with the risk if the consequences are manageable (e.g., schedule buffer for bad weather).

3. Make a plan: Create a detailed risk management plan outlining actions, responsible parties, resources, and timelines for addressing each risk.

4. Communicate: Share the matrix with stakeholders for informed decision-making.

5. Update regularly: Review the matrix as your project progresses. New information may require updates to the matrix and the risk management plans.

By following these steps, your risk matrix becomes a dynamic tool for proactive risk management throughout your project life cycle. It’s particularly effective when integrated into broader procurement transformation, allowing for a more structured approach.

How to Maintain a Risk Assessment Matrix?

A powerful matrix needs ongoing care to stay effective, this involves:

• Train & review: Training teams on risk assessment and holding regular reviews (monthly is a good start) to update risks, ratings and controls based on project progress and new information.

• Team & stakeholder input: Encourageing team member input for a comprehensive risk view, and keep stakeholders informed about risks and mitigation plans.

• Communication & process: Maintain clear communication channels for risks with internal and external stakeholders and consider process improvements to reduce them.

• Proactive measures: Design processes, products, or services with risk mitigation in mind, have contingency plans, and learn from industry best practices.

• Lessons learned: After project completion, analyse past data to identify common risks and refine your risk assessment process for future projects.

By following these practices, risk matrix remains a collaborative tool that continuously improves project outcomes.

Example of a Risk Assessment Matrix

The following is an example of a basic 4×4 risk matrix, focusing on a construction project. This format can be adapted to specific needs regarding project complexity.

Risk rating: The risk rating is determined by the intersection of the risk probability and impact. Here, a 4×4 risk matrix example is used, resulting in 16 possible risk ratings (e.g. very likely – high = very high).

Control measures: The final column outlines some possible control measures to mitigate the identified risks. These can be further elaborated upon in a risk management plan.

What Tools Are Available to Create a Risk Assessment Matrix?

There are many ways to create a risk matrix. Popular options include:

• Spreadsheets (Excel, Google Sheets): Ideal for customisation and control over layout, categories and rating scales. Great for smaller projects or when a specific format is needed.

• Project management software (Asana, Trello): Streamlines risk assessment within your existing workflow and fosters collaboration with built-in features and familiar interfaces.

• Dedicated risk management software: Offers advanced features like risk scoring and trend analysis for complex projects or high-risk environments. Perfect for in-depth analysis and comprehensive risk management plans.

• Online templates: Free or paid matrix templates provide a quick starting point with pre-defined categories for basic projects, saving time on initial setup.

To determine the suitable option, there are some key features to consider in the software selection process:

• Pre-built risk register templates.

• Integration of risk register for centralised risk data storage.

• Ability to define and customise risk matrix categories.

• Options for assigning probability and impact ratings.

• Automated risk score calculations (if using a quantitative approach).

• Sorting and filtering functionalities to prioritise risks.

• Risk owner assignment for clear accountability.

• Risk mitigation progress tracking.

• Risk reporting.

• Visualisation tools for charts and heatmaps to represent risk data.

Overall, choosing the right method depends on project complexity, team size and desired features. The key is a clear, concise and easy-to-understand matrix.

What Are the Benefits & Limitations of Using a Risk Assessment Matrix?

The risk matrix offers valuable tools for project management, but it is important to understand its strengths and limitations.

Benefits:

• Proactive risk management: The matrix allows for early identification and mitigation of risks, minimising their impact on the project.

• Prioritisation and focus: By highlighting critical risks (high probability and impact), the matrix helps focus resources and attention on the most important issues.

• Improved decision-making: A clear and visual representation of risks allows for better-informed decisions regarding resource allocation, project planning and overall management strategies.

• Enhanced communication and collaboration: The matrix provides a standardised and concise way to communicate project risks to all stakeholders, fostering transparency and collaboration.

Limitations:

• Subjectivity and uncertainty: Assigning risk probability and impact involves some degree of subjectivity, and unforeseen events can always emerge.

• Data dependence: The effectiveness of the matrix relies on the quality of the data used. Inaccurate or incomplete information can lead to misleading results.

• Oversimplification: Complexities of real-world risks may not be fully captured in a matrix. Use it as a guide, not a definitive answer.

• Time and effort: Creating and maintaining the matrix requires time and effort.

• Over-reliance: The matrix should complement sound project management practices and continuous monitoring, not replace them.

Conclusion

The risk assessment matrix is a powerful tool for professionals across various fields, including engineering, construction, procurement, financial, and IT among many others. It offers a systematic approach to managing risks, ultimately boosting your project’s success rate and avoiding costly surprises. This is not a one-time activity, it is an ongoing process, requiring continuous monitoring and adaptation throughout the project lifecycle.

Common FAQs About the Risk Assessment Matrix

1. Is a risk matrix complex to create?

Creating a basic risk matrix is fairly straightforward. You can use a simple Excel sheet with a grid and defined scales for likelihood and impact. More complex projects might benefit from dedicated risk management software with additional features.

2. What if I can not decide between two likelihood or impact scores?

Some subjectivity in scoring is acceptable. When in doubt, prioritise caution and select the higher rating. This approach safeguards against underestimating potential risks. You can always refine your assessments as you gather more information.

3. Who should be involved in creating and maintaining the risk matrix?

Involving a variety of stakeholders in the risk assessment process is beneficial. This could include project managers, team members, subject matter experts, and even clients. Each person brings a unique perspective that can help to identify potential risks and develop effective mitigation strategies.

4. What are some alternatives to the risk matrix?

While the risk matrix is a popular tool, there are other risk assessment methods:

• FMEA (Failure Mode and Effect Analysis): The FMEA method focuses on identifying potential failure modes in a system or process.

• What-If scenario planning: This involves brainstorming potential negative outcomes and considering mitigation strategies.

• Delphi technique: This method gathers expert opinions anonymously to assess risks and their impact.

• SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats): This goes beyond threats, considering your project’s strengths, weaknesses, and opportunities, providing a broader perspective to inform risk management strategies and leverage opportunities to mitigate threats.

The best approach may involve combining the risk matrix with other techniques for a more comprehensive understanding of project risks.

5. Can I use a risk matrix for anything other than projects?

Absolutely, risk matrices are valuable tools in various contexts, including:

• Product development: Identify potential issues that could affect product launch or performance.

• Business decisions: Assess risks associated with new market ventures or strategic initiatives.

• Personal finance: Evaluate potential risks to your financial goals, such as job loss or unexpected medical bills.

6. Where can I find more information about risk matrices?

Many resources are available online and in libraries. Project management institutes and professional risk management organisations often offer resources and training materials.

By addressing these FAQs and effectively using a risk matrix, you can significantly enhance your project risk management skills and increase chances of project success.

The post Risk Assessment Matrix – What Is It & How It Works appeared first on Fractory.

What Is Target Costing?

Target costing strategies ensure that cost management is embedded into the design process from the start. Unlike traditional costing approaches that determine costs after the design phase, target costing begins with the end price in mind. This involves setting a target selling price based on market research and desired profit margins, then working backward to determine the maximum allowable cost that will still enable the desired price and top profit margin.

Formula for Target Costing:

Target Cost = Market Price – Desired Profit Margin

This formula helps businesses align their product design and production costs with the target pricing strategy, ensuring that the final product meets the competitive price expectations and desired profit margins. By setting a target cost early, companies can avoid costly design changes and better manage their production costs throughout the product development cycle.

Target Costing in Engineered Solutions

For engineered solutions, target costing involves a precise focus on balancing cost, functionality, and quality. The target costing process ensures that the final product or service used meets both customer expectations and financial objectives. Here’s how target costing can be applied to engineered products:

Steps in Target Costing for Engineered Products

1. Market Research: Begin by conducting thorough market research to determine the competitive market price and the amount customers are willing to pay for the proposed product. This research helps establish a realistic target selling price that aligns with market conditions and customer expectations.

2. Cost Goal Setting: Using the target selling price and desired profit margin, calculate the maximum cost that the product can afford. This maximum cost serves as a benchmark for design and manufacturing decisions, ensuring alignment with the target pricing strategy and overall profitability goals.

3. Design Optimisation: Engineers must focus on optimising the product design from concept generation to final delivery to meet the target cost without compromising on performance or quality. This might involve Design to Cost (DTC) and value engineering techniques to identify cost-saving opportunities, such as selecting cost-effective materials or simplifying and fool-proofing the design to reduce production costs and errors.

4. Supplier Collaboration: Effective collaboration with suppliers is crucial for achieving the target costs for components and materials. By working closely with suppliers, companies can negotiate better terms, identify cost-saving opportunities, and ensure that components meet both quality and cost requirements.

5. Continuous Monitoring: Throughout the design and development cycle, it is essential to monitor costs regularly to ensure that the project remains within the target cost. This involves tracking expenses, evaluating cost-saving measures, and making adjustments as needed to stay aligned with the final target cost. An often-overlooked area in cost control is tail spend – those low-value, one-off purchases that collectively impact budgets.

Incorporating Target Costing into Product Development

Integrating the target price into the product development cycle involves several key considerations:

1. Design Phase: During the design phase, target costing requires engineers to balance technical requirements with cost constraints. This may involve iterative design adjustments to ensure that the product meets both performance and cost objectives.

2. Value Analysis and Value Engineering: Implementing value analysis and value engineering techniques can help identify cost-saving opportunities and optimise product design. These approaches focus on improving the value of the product by enhancing functionality while reducing costs.

3. Life Cycle Costing: Consider life cycle costing to evaluate the total cost of ownership, including initial production costs, maintenance, and disposal costs. This comprehensive approach helps in setting realistic target costs and ensuring long-term profitability.

4. External Factors: Be aware of external factors such as market changes, regulatory requirements, and supply chain disruptions that can impact the target cost. Proactive cost planning and flexibility in design can help mitigate these risks.

Case Study: Fractory’s Role in Engineered Solutions and Target Cost Contracts

Fractory’s advanced digital manufacturing platform provides customers with a valuable tool for managing target costing in engineered solutions and contracts. By leveraging Fractory’s capabilities and expertise, companies can streamline cost management and achieve their target pricing goals more effectively.

Case Study: AIE’s Success with Fractory

Advanced Industrial Engineering, an industrial machinery manufacturer, faced challenges meeting target costs for a bespoke production line project. They required a solution to manage production costs efficiently and align the price of their offering with customer expectations.

Solution:

AIE adopted Fractory’s platform to enhance their target costing process. Fractory offered several key benefits:

1. Real-Time Cost Analysis: Fractory’s instant quoting system enabled AIE to quickly assess the cost implications of design changes. This real-time Design for Manufacturing (DFM) feedback facilitated timely adjustments to stay within the target cost.

2. Optimised Production Processes: Fractory’s account managers, who are experienced mechanical engineers, helped AIE select the most cost-effective production methods and materials. They considered factors such as tolerances, material availability, and part quantities to ensure alignment with target pricing strategies while meeting the expected lead time. This approach delivered high-quality results while keeping costs in check.

3. Enhanced Supplier Selection & Communication: Fractory’s expertise in matching projects with specialised manufacturers ensures that each step of the project is handled by the most qualified and cost-efficient supplier. In the case of AIE, the project was split between three manufacturers: one for laser cutting and bending, another one for welding, and a third for powder coating. Each manufacturer focused on their area of expertise, improving cost management and product quality. Fractory acted as the sole point of contact, significantly reducing the time and complexity of managing multiple suppliers.

Outcome:

With Fractory’s support, AIE successfully achieved its target cost while streamlining their procurement process. The platform’s real-time cost analysis, optimised production processes and enhanced supplier collaboration not only helped the business to meet its target pricing objectives but also accelerated the project’s expected completion time, providing the business with a significant competitive advantage.

Case Study: Cutting Procurement Costs - Advanced Industrial Engineering

Target Costing in Contracts

Target costing can also be effectively applied to contractual agreements, known as target cost contracts. These contracts establish a target cost before the agreement is finalised, representing the expected expense for delivering the agreed-upon product or service. Here’s how target pricing and cost contracts function:

How Target Cost Contracts Work:

1. Negotiation: Before signing the contract, the contractor and client agree on a target cost based on detailed cost estimates and project requirements. This target cost becomes the pricing benchmark for the contract, setting expectations for cost management and delivery.

2. Cost Management: During the project, the contractor works to deliver the product or service within the target cost. Any cost savings realised below the target cost are often shared between the contractor and client through a predefined profit-sharing arrangement, which incentivises cost control and efficiency.

3. Adjustments: If actual costs exceed the target cost, the contractor may be responsible for covering the additional expenses, depending on the contract terms. This arrangement encourages proactive cost planning and effective cost management to avoid overruns and maintain financial performance.

Conclusion

Target costing is a crucial strategy for managing costs in engineered solutions and contractual agreements. By setting a target selling price from the beginning and working closely with suppliers, companies can ensure that the prices of their products meet both financial and market expectations.

Fractory’s cloud manufacturing solutions play a significant role in supporting target costing efforts, offering real-time cost analysis services, streamlined production processes, and enhanced supplier integration services. For procurement professionals and engineers looking to optimise their cost management and achieve their pricing goals, Fractory provides invaluable tools and insights.

Explore how Fractory can support your target costing initiatives to reduce costs and drive success in your company’s engineered solutions.

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Essentially, Value Engineering seeks to deliver the required functionality at the most advantageous cost. At the same time, Cost Engineering ensures these costs are accurately estimated and controlled through detailed cost estimating and profitability analysis.

Core Principles of Value Engineering

In the context of Value Engineering, “value” is often defined as the ratio of function to cost. In simpler terms, a high-value product or service delivers the necessary features at a reasonable price. Value engineering can improve this ratio in three principal ways:

1. Enhancing Functionality: This approach focuses on improving the capabilities of a product or service without significantly increasing the cost. Enhancements could involve adding new features, improving performance, or enhancing the user experience.

2. Accurate Cost Estimates: A key component of value engineering is the development of precise cost estimates. This ensures that decisions are made based on reliable data, which helps in identifying cost-saving opportunities and avoiding budget overruns. Cost engineering plays a crucial role here, providing a clear understanding of where money is spent and highlighting areas for potential savings.

3. Reducing Cost: This strategy aims to achieve the desired functionality at a lower cost. Methods might include using alternative materials, simplifying designs, or streamlining processes.

Value engineering is not merely about cost-cutting, it is a creative problem-solving process that seeks smarter and more efficient ways to solve problems and achieve the desired outcomes.

Benefits of Value Engineering

Implementing value engineering offers numerous advantages, including:

• Reduced Project and Business Costs: By identifying and eliminating unnecessary costs, value engineering helps support total cost management. Cost engineering ensures these savings are systematically achieved.

• Improved Functionality and Performance: Value engineering can lead to better-performing products and services, even within budgetary constraints.

• Enhanced Product Quality: The process often results in a more critical review of materials and components, potentially leading to a higher-quality end product.

• Increased Efficiency and Productivity: Streamlining processes and eliminating unnecessary steps can significantly improve overall efficiency and productivity.

• Reduced Environmental Impact: By optimising materials and processes, value engineering can contribute to a more sustainable approach.

Examples of Value Engineering in Action

Value engineering can be applied across various industries. Here are a few examples:

Construction

A complex architectural design might be simplified to reduce construction costs without compromising functionality. The redesign of the Transbay Transit Center in San Francisco incorporated value engineering to cut $1 billion from the project’s budget while maintaining core functions. Cost engineering was vital in ensuring the revised budget was accurate and achievable.

Manufacturing

A company could seek to substitute a hard-to-source high-priced material with a readily available, cost-effective alternative that offers a lower cost and similar performance. For example, Toyota uses value engineering to continually improve its production processes, resulting in significant cost savings and efficiency improvements.

Software Development

A software development team might streamline their coding process to reduce development time and associated costs. Agile methodologies often incorporate value engineering principles to enhance project value by iterating and refining functionality.

When to Use Value Engineering

Optimal Timing for Value Engineering

Technically speaking, value engineering can be undertaken at any stage of a project or product life cycle. However, the earlier it is integrated into the process, particularly during the schematic stage, the more advantageous it is. Program planning and design are the two critical phases in the building lifecycle where value analysis can create the most significant benefits. If value engineering turns into rework or causes project delays, it ceases to be beneficial. The following graph illustrates the point in the life cycle at which value engineering shifts from yielding financial gains to incurring financial losses.

Value Engineering During the Building Lifecycle

One area where the design and project management team must never compromise is safety. Any change that would result in a violation of building codes or otherwise jeopardise the health and well-being of the facility’s users should be immediately rejected.

It is important to understand that value engineering is not merely a reactionary measure to avoid budget overruns. The objective is not simply to cut costs but to maximise functionality at the lowest possible expense. Value engineering is a methodology that ensures the owner is not overpaying for quality when an equally effective, less expensive option is available. Ultimately, product quality remains the paramount goal.

Role of the Value Engineering Team

The success of value engineering relies heavily on the collaboration and expertise of a diverse team. Each member of the value engineering team plays a crucial role in ensuring that the project meets its objectives in terms of functionality, cost-efficiency and quality.

Project Manager

The project manager oversees the entire value engineering process and programme planning, ensuring that all activities align with the project’s objectives and timelines. They coordinate between different team members, manage resources, and ensure that the value engineering activities integrate smoothly into the overall project management framework.

Cost Engineer

The cost engineer is responsible for developing accurate cost estimates and analysing cost data throughout the project. Cost engineers support cost estimating, identifying cost-saving opportunities, and ensuring that cost-efficiency is achieved without compromising functionality or quality.

Design Engineer

The design engineer focuses on the technical aspects of the project, ensuring that the proposed value engineering solutions are feasible and meet the required specifications. They work on modifying designs to enhance functionality and reduce costs, often suggesting alternative materials or design simplifications.

Procurement Specialist

The procurement specialist ensures that the materials and components needed for the project are sourced cost-effectively without compromising quality. They explore alternative suppliers, negotiate contracts, and ensure that raw materials meet the project’s specifications.

Quality Assurance Engineer

The quality assurance (QA) engineer ensures that the value engineering solutions do not compromise the quality and safety of the final product. They conduct rigorous testing and validation of proposed changes, ensuring compliance with industry standards and regulations.

Sustainability Expert

A sustainability expert may be included in the value engineering team. Their role is to ensure that the proposed solutions align with environmental goals, such as reducing the carbon footprint, using sustainable raw materials, and minimising waste.

Implementing Value Engineering: A Step-by-Step Guide

Implementing value engineering involves a structured and systematic approach. Here is a step-by-step guide:

1. Information Gathering: Understand the project scope, objectives, and constraints. Gather data on costs, functions, and performance requirements. Cost engineering tools can be invaluable during this phase.

2. Function Analysis: Identify and prioritise the functions of the product or service. This involves determining which functions are essential and which can be modified or eliminated.

3. Creative Phase: Generate ideas for improving value. This phase encourages brainstorming and innovative thinking to explore different ways to enhance functionality or reduce costs.

4. Evaluation: Assess the feasibility and impact of the ideas generated. This involves detailed analysis to select the most promising solutions. Cost engineering ensures the financial viability of these ideas.

5. Development: Develop the selected ideas into workable solutions. This phase includes creating detailed designs, models, or prototypes.

6. Implementation: Execute the developed solutions. This involves coordinating with stakeholders, managing resources, and ensuring the changes are integrated smoothly into the project.

7. Review: Monitor the implemented changes to ensure they achieve the desired outcomes. This phase includes collecting feedback, measuring performance, and making necessary adjustments. Cost engineering continues to track and manage costs throughout this phase.

Conclusion

Value engineering, supported by cost engineering, is an invaluable tool for businesses and organisations of all sizes. It is a continuous process that can be applied throughout various components of a project’s lifecycle, from initial design to ongoing maintenance. By embracing value engineering, organisations can achieve optimal performance while ensuring cost-effectiveness.

For further reading, resources and practical examples, consider exploring the following resources:

• “Value Engineering: Practical Applications…for Design, Construction, Maintenance & Operations” by Larry W. Zimmerman and Glen D. Hart: This book provides comprehensive insights into value engineering principles and their application in various industries.

• American Society of Mechanical Engineers (ASME): Their website offers articles and case studies on value engineering applications.

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The product life cycle model can help us answer these questions and many more. Smart entrepreneurs have relied on it for decades to devise efficient marketing and sales strategies that generate the maximum revenue.

It has far-reaching implications as every single product goes through the same four phases mentioned in this model. A careful review of the model would thus benefit any product.

This article will give you a deeper understanding of what this model is and help you answer all the above questions with clarity. Make sure you read until the end to take full advantage of it.

What Is Product Life Cycle?

The product life cycle is a powerful administrative tool to understand the different phases that a product goes through. It maps a product’s journey from its launch until its discontinuation.

The tool has wide-reaching implications in marketing and sales but it can also aid in the design and decision-making process for the product.

The original product life cycle had five phases: development, growth, maturity, saturation and decline. It was developed by Raymond Vernon in 1966.

Over the years, the saturation stage was discarded and some added a different fifth stage known as the introduction stage.

But in today’s modern world, the development and introduction stages are highly interdependent as it is possible to get real-time feedback and bring effective changes in both of them.

Product Life Cycle Stages

In this article, we shall combine the first two stages (development and introduction) and make our product life cycle a four-stage process. It will then consist of the following four stages:

• Development and introduction stage

• Growth stage

• Maturity stage

• Decline stage

Development and Introduction Stage

The development stage is where the product life cycle starts. Before this stage, we have already identified a market for the product and ensured that the production is feasible.

For innovative products, a market may not be presently available but we know there is potential. It is prudent to start developing the product after the market studies.

High costs are involved in this stage as there is very little or no revenue and a lot more costs related to the development and introduction of the product.

The product may struggle with brand recognition. As a result, we need very specific marketing and advertising strategies.

This is especially true if the product is innovative or has new features that are not currently available in the market. Reaching out to influential personalities in your product’s ecosystem is one way to boost product awareness.

In addition to the above costs, you may find it difficult to find a supplier who is willing to stock your product during this stage.

You may also need to extend a credit line to the willing suppliers/retailers which is an additional cost as no revenue is generated until a sale takes place.

Some great sales strategies to succeed in the market introduction stage are:

• Free trials/samples

• Moneyback guarantee

• Discounts for early buyers

For the marketing strategy during the introduction phase, the management may choose from one of the following options:

• Rapid skimming (high price, high-level promotion)

• Slow skimming (high price, low-level promotion)

• Rapid penetration (low price, high-level promotion)

• Slow penetration (low price, low-level promotion)

The choice depends upon factors such as the type of product, industry and existing competition.

Examples of products in the development and introduction stage

Some of the most popular products in the development and introduction phase today are:

1. Self-driving cars

2. Artificial intelligence applications

3. Smart glasses

4. Foldable and rollable smartphones and TVs

Growth Stage

We enter this stage after successfully introducing the product to the target market.

If the product is appealing, mass-scale adoption begins. The adoption may be slow at the start but as compounding takes over, the sales volume starts increasing fast during the growth phase.

More and more people sign up for the product/service as early buyers and promotional offers start bringing in more traffic. More suppliers are willing to stock the product and ready to pay cash as the demand increases.

The management may take the step to approach bigger supermarkets besides small retailers. It may also strive to enter new markets and transition from a niche to a more diverse group of buyers.

The goal is to have as much market penetration as possible to reach full sales potential. Collecting customer feedback and implementing it is crucial to further improve the product and meet this goal.

The growth stage is also the stage where competitors will usually enter the market. This is because, many times, companies wait for a market to be established to bypass some of the costs associated with the introduction phase.

But once your product creates that market, competitors will almost always come up with products that are either a direct copy or very similar to your offering with some added features.

Examples of products in the growth stage

Some of the most relatable examples of products in the growth stage are as follows:

1. Electric vehicles

2. Cloud storage

3. Online education

4. Smartwatches

5. Bluetooth wireless earphones

Maturity Stage

As the product grows further through research and customer feedback, it enters the maturity stage.

In the maturity stage, the product has become its best version and enjoys peak market penetration. The demand plateaus and the product sales increase at a slower rate than the growth stage.

This stage is the most profitable but also the most competitive.

If there are few competitors, the company could sell the product at higher prices to increase profit margins. But in the face of stiff competition, it may be wiser to keep prices low to protect your market share.

Ideally, you want to hold your product in this stage for as long as possible. Working on product differentiation and brand value are some ways to do that.

The company may strive to modify the product for a wider market based on users’ demographics, feedback and geography. This strategy can also help extend the maturity stage for your product.

Examples of products in the maturity stage

Some common products that have reached the maturity stage are as follows:

1. Smartphones

2. Streaming services

3. Laptops

4. Coca-Cola

Decline Stage

Most products enter the market decline stage at some point. In this stage, the product advances towards obsolescence. This may be due to market saturation or alternative products that deliver greater value.

The user base of your existing product will fall as newer, more efficient technology takes its place. For example, the entry of sustainable electric vehicles has affected the sales of fossil fuel-based vehicles.

In such a situation, companies have two options. Either discontinue their own product and reinvest into emerging trends or update their product if feasible to match their new competitors.

However, if your existing product cannot compete with these emerging alternatives, you will end up losing your revenue, market share and profitability.

Examples of products in the Decline stage

Some products that are already in the decline phase are as follows:

1. Diesel vehicles

2. Personal computers

3. Wired earphones/headphones

4. Hoverboards

5. Apple iPod and other dedicated MP3 players

6. CD/DVD players

Benefits of Implementing Proper PLC Strategies

The Product life cycle strategies give us approaches to take during different stages of the product.

These strategies, when implemented effectively, can be the difference between successful products and those that never even break even. This is definitely the primary advantage.

But there are several other advantages to using PLC to direct our product strategies. Some of these are:

• Shorter time to market

• Higher quality product with increased reliability

• Increased product safety

• Reduced costs at every life cycle stage

• Reduced waste and errors

• Enhanced ability to manage seasonal fluctuations

• Increased efficiency and profitability of distribution channels

• Higher ROI of marketing campaigns

• Increase in product lifetime by modifying the approach as the product moves through the life cycle

• Efficient use of customer feedback to improve the product as per consumer preferences

• Well-managed and profitable end-of-life product management

• Identification of more sales opportunities

• Better forecasting and resource planning for increased profits and reduced waste in the future

• More efficient control of inventory

• Identification of trends and errors beforehand and preparation 

• Improved supply chain collaboration

• Risk reduction

To Sum It Up

The advantages of using a product’s life cycle for decision-making far outweigh its disadvantages. Combining the PLC approach with other project management methods, such as lean manufacturing, can increase the positive effects of adaptive management even further.

Through efficient product life cycle management, products like Nintendo, Kellogg’s, and iPhones have been able to extend their maturity phase into decades. Their products are constantly updated to make them appear fresh to consumers.

Thus, PLC strategies can keep the competition at bay and extend the maturity phase and profitability well beyond expected durations.

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The 5S technique not only provides us with the actions to perform but also the right sequence when going about it. 

5S is a lean manufacturing method and so, in order to understand it better, we should first learn a bit about the origins of lean manufacturing and what it entails.

Origin of Lean Manufacturing

In the early 20th century, the manufacturing industry witnessed a significant shift as it switched over to mass production. The manufacturers were now setting eyes on international markets. In this race to gain market share, companies had to improve upon a number of factors such as efficiency, waste, speed, and consistency to surpass their regional and international competition.

How Toyota Changed The Way We Make Things

Organisations developed many methods to achieve these goals. Clubbed together, they were referred to as lean manufacturing methods with 5S being one of them.

What is Lean Manufacturing?

It is the application of lean principles, practices, and tools to develop and manufacture products. The primary goal is to add value to the products or services for the customer.

Anything that doesn’t add value to the customer experience is eliminated or reduced as much as possible. Only features, processes, services, and products that add value are retained and are deemed worthy of further investment if necessary.

Different Types of Lean Manufacturing Tools

Under its umbrella, lean manufacturing houses many different tools to minimise waste and maximise productivity. Some of the most popular tools are jidoka, poka yoke, kanban, heijunka, kaizen, and 5S. Industrial engineers often combine many such tools to develop an effective system for a specific company.

One such system that tremendously impacted the West came out of Japan. It was known as the Toyota Production System (TPS). 

TPS or “The Toyota Way” is a set of techniques that continuously improves production efficiency to deliver better value to customers. 5S began as a method employed in TPS.

What is 5S?

5S is a five-step process to improve workplace efficiency developed by Hiroyuki Hirano. It originated in Japan where the five steps are known as Seiri, Seiton, Seiso, Seiketsu, and Shitsuke. These steps, when put into practice, will reduce waste and elevate the safety standards of companies.

A cluttered workspace can lead to part/tool misplacements, mistakes, production slowdown, and even injury. This can affect production efficiency and cause a loss of reputation. By organising the workplace, employees can avoid such instances and all departments can function just as they should.

5s Steps

5S is an extremely flexible technique that can adjust to different time scales as needed.  The five steps in 5S are as follows:

• Sort
• Shine
• Set in Order
• Standardise
• Sustain

Sort (Seiri)

The first step in 5S is Sort. In this step, the participants sort through their tools and equipment at the workstation and transfer them to their designated storage locations. It also entails the removal of parts, tools, equipment and materials from the workspace that aren’t necessary for the moment. Employees either move them to storage areas or discard them.

The process starts by removing all parts from a target area and piling them up on one side. We use the following questions to assess the value of each item.

• What purpose does this item serve?
• Who uses it?
• When was it used last?
• How frequently do they use it?
• Is it really necessary to keep it here?

The employees using that workstation are in the best position to answer the above questions. They can use the answers to sort items into different categories. The 5S program guides suggest three or four categories to sort items into. The 4 categories are:

• Keep
• Observe
• Discard
• Transfer

Keep

This category is for items that the employees use frequently. The employees keep them within reach so that minimum time is needed to procure them. We return these items to the target area for the employees’ use.

Observe

To this category, we relegate items whose usefulness we are unsure of. These items belong to the “red tag area”. Often, a physical red tag is attached to them to identify these tools and items whose usefulness is being assessed.

We have to determine their necessity by monitoring their use over a period of time that depends on the business cycle.

For example, for an assembly line that manufactures and delivers pizza, a week’s time would suffice as they would have completed hundreds of deliveries by that time to make an accurate assessment of the usefulness of each item in the “Observe” category.

Discard

This category consists of items that do not add any value to the work environment but have been overlooked. Examples include expired or degraded chemicals, broken tools, outdated equipment, etc.

The workstation is better off without them. The management removes them from the 5S’d space and either sells, recycles, or discards them.

Transfer

Rarely used items that come in handy during special operations are a part of this category. This can include special tools for overhauling equipment, a second set of tools for major overhauls, etc.

Depending on the nature of the items, employees will either store them in a special storage area or move them to a department where they would make more sense.

The frequency of sorting will be based on the application. It can be weekly, monthly, quarterly, or annually for spaces such as storehouses or filing cabinets. Some applications may need a daily sorting routine.

Set in Order (Seiton)

The second step in the 5S process is Set in Order. Once the first step is complete, the employees are only left with items that are required for the workstation to run effectively. They can further improve efficiency by arranging the items in a way that promotes minimal motion, transportation, and waiting time.

Every time an employee can’t find a tool or moves more than necessary to complete an action, the company loses time, and by extension, money. To minimise these losses, the objects must be arranged skillfully.

To perform this job well, the operators have to monitor their tasks, their frequency, and the path they take to complete them. With this information, they can come up with an arrangement that makes the most sense. We must ask the following questions when carrying out research for this step:

• Who uses which item?
• What is the sequence of their use?
• What is the frequency of their use?
• What paths are taken by its users?
• Can we optimise the length of this path to cut down unnecessary motion?

Our goal is to create an arrangement such that the tools are easy to find, easy to use, and easy to return to their position on completion.

The employees may need to personalise their workstations as the same arrangement may not work for everyone. An example of this personalisation is taking into account an operator’s dominant hand. Arranging parts should keep individual idiosyncrasies in mind to maximise the efficiency of the setup.

Remember the old adage “A place for everything and everything in its place.”

Shine (Seiso)

After the objects have been sorted and transferred to their designated places, the third step in 5S comes into the picture. The aim of Shine is to have a clean workplace. It strives to build a routine, daily if necessary, to ensure that the workplace is free of any dirt or grime that inevitably builds up.

The cleaning of a work environment must not be left to the janitorial staff. Everyone who uses a workplace is responsible for its cleanliness. This can be done by means of thorough dusting, sweeping, vacuuming, surface wipe-down, mopping, polishing, etc. Putting away used equipment is just as important. These tasks make the workers feel more accountable for their workstation. This feeling translates into greater investment in the job carried out and high-quality results.

At any rate, having a clean surrounding is safer. For example, removing spilt oil or other rubbish post maintenance will prevent slips, trips and falls. It can also reveal important floor tape lanes such as emergency pathways to safety that may be obscured due to dust or other contaminants on the floor. 

Cleaning tools and the surrounding area also means tools and other expensive equipment will last longer. Rusting and other forms of degradation are averted. A longer lifespan means a longer duration between tool replacements.

Preventative Maintenance

Another important aspect of the Shine stage is preventative maintenance.

Every company has a planned maintenance system that must be adhered to for the proper operation of machinery. They have a daily, weekly, monthly, biannual, and annual maintenance schedule designed by the equipment manufacturer. Daily maintenance almost always includes ensuring clean surroundings to prevent contaminants from entering the machinery.

Adhering to these maintenance routines leads to a longer machine lifespan and fewer breakdowns. This ultimately causes time savings and prevents any losses due to work stoppage.

Finally, the organisation must adopt a proactive (and not reactive) approach to cleaning. Waiting too long before cleaning again indicates a lack of cleaning culture. Yes, this step guides workers when it comes to cleaning up an area but the ultimate goal is to set up an organised culture that prevents messes from occurring at all.

Standardise (Seiketsu)

The first three stages in 5S demonstrate the method to maximise a working facility’s efficiency. Following this method boosts efficiency but the effect is temporary.

Over time workstations get busy, especially during demanding projects, and everything else is put on the back burner to increase production. Employees can forget how certain tasks were carried out.

This is where the fourth step comes in. The primary objective of the standardisation step is to provide SOPs (Standard Operating Procedures) for 5S implementation. It creates a system that turns individual instances of cleaning sprees into habits. It provides task descriptions, schedules, checklists, and inspection criteria for the tasks. Such a universal system is crucial to ensure all people are on the same page with regard to a certain job.

These SOPs inform the employees as well as the senior management of their tasks, how they are expected to do them, and how to inspect them. It defines the expected frequency as well as the quality of work.

Some tasks may need to be performed every day while others may be performed at greater intervals. Standardising 5S activities brings consistency to an organisation.

Sustain (Shitsuke)

The 5S program with all its set standards is now in place. But as with many programs, the initial excitement of a 5S program can fizzle out over time. The fifth step strives to consolidate 5S in place by creating constant reminders for the workers to implement 5S in the best possible manner. 

It also involves training and getting more and more people involved in the 5S program. The goal is to make 5S an integral part of the organisation’s work culture. This is the only way to harness the benefits of a 5S culture. Small, consistent improvements over a long period of time can create a world of positive difference.

Besides, with time, certain limitations of the applied 5S methodology may pop up. The fifth step takes into account any previously missed inconsistencies and updates them as necessary.

Continuous improvement ensures that the 5S methodology in place fits in perfectly with the company requirements. To this end, it is crucial to seek and implement employee feedback and suggestions.

The feedback also informs us of the effectiveness of the 5S program. Remember, the ultimate goal of the program is to increase efficiency by curtailing the wastage of effort, time, and money. Having tabs on these parameters helps us ensure that adequate progress is being made. Using actual statistics instead of guessing is necessary even if the results aren’t as stellar as we expected them to be.

The 6th S

Modern 5S setups have introduced a 6th S that stands for safety. Neglecting safety can cause loss of life/injury, harm to the environment, and loss of the reputation of the company. As such, repercussions arising from inadequate safety measures can cost companies millions of dollars in recompense and work stoppages.

Therefore, it is important that due diligence be paid to safety to maintain and improve the efficiency of an organisation. Especially in companies where workers are constantly exposed to danger.

This could mean training the crew on fire hazards and fire extinguishing techniques, proper use of PPE, visual safety notices, proper use of tools/equipment, lockout/tagout procedures, and so on.

There is, however, some controversy about whether a sixth S needs to be a part of the 5S program. The 5S program inherently focuses on safety through its various stages, especially through Set In Order and Shine.

The proper implementation of 5S can introduce a robust safety culture that prevents many mishaps.

For example, by proper sorting, acids and bases will never mix preventing the risk of fire. Good workplace organisation will have safety equipment marked clearly. Adequately cleaned workplaces will prevent slips, trips, and falls.

In offices where the probability of hazards occurring is low, it is beneficial to skip the 6th S and instead implement it through the 5S’s. This is because following extreme safety protocols can lead to wasted resources and efficiency.

On the other hand, high-risk areas must have adequate safety regulations and implementation even if it causes a loss of time and resources. A separate sixth step must be added besides implementing safety measures through the 5s as they will not be able to cover all hazards.

Either of the abovementioned approaches to safety may be the right choice for your facilities as each one is built differently. Regardless of the choice made, it is important to consider safety when redesigning workplaces.

Benefits of 5S

The 5S method provides many benefits. A well-rounded 5S system can improve the efficiency of a company anywhere between 10…30%. It can cause remarkable changes in the way an organisation is run, even for those that thought there was no scope of improvement. The following benefits may be noticed.

5S at Workplace

Increased efficiency

One of the prime benefits of 5S is the increase in efficiency and productivity of the organisation. A decluttered and well-organised workspace helps employees do more in less time.

Reduced wastage

A 5S program leads to a reduction in misplaced and damaged tools and equipment. The proper storage of items in a safe manner in their designated spaces increases the lifespan of the tools. 

Wastage in other areas such as unnecessary transportation, excess inventory, waiting time, and extra motion is also reduced. 

Improved employee morale

A well-organised and timely managed workspace clearly lays down the expectations and the methodology will help with achieving them. Constant feedback from employees includes them in the decision-making process. This boosts employee morale. The fact that they can personalise their workspace helps as well.

Improved work quality

The increased morale and a standardised process ensure consistent, good-quality output from employees. The excellent manner in which the equipment is maintained also contributes positively to the quality of the final product.

Fewer mishaps

The number of incidents and accidents also goes down with time as 5S becomes highly integrated into day-to-day activities. This means a safer work culture and a high reputation for the company.

Visual Workplace

Implementing the 5S framework can include a lot of visual aids. These help by providing easy-to-follow instructions that can be interpreted on the go.

Here we bring out some methods of highlighting important messages with visuals.

Labelling

Using labels is a simple way to make sure a person finds the right choice at first glance. For example, labelling tool drawers, shelves, etc. can help with identifying the location of bolts and nuts without having to scan through the inventory needlessly.

Even areas can be labelled to ensure that larger machinery or trash collectors are always in the right spot so we would know where to find them – always.

Shadow boards

These tool stands have the “shadow” of a tool imprinted onto the backboard. It makes it easy for the team to find the right spot for the tool quickly when returning the instrument back to its place. Also, it is simple to spot when something you are looking for has already been taken.

Floor tape

We already touched upon that but floor markings are a great visual aid to restrict areas of movement or designate a certain place for goods.

Restricting areas of movement is especially important in terms of workplace safety because you can prevent team members from entering danger zones near working machinery that are not self-evidently dangerous at first glance.

Signage

This is basically the same as labelling, just on a grander scale. Large signs and posters can help to position areas from far away, making the commotion straightforward.

Also, some signs can just have reminders about 5S principles. For example, a sign asking to clean up the area after finishing work can have a significant impact on the success of implementing 5S.

Red tags

This is a visual help from the very first step – sort. Red tags are attached to equipment if we are not 100% sure of their necessity at a certain workplace. Having the stickers helps to keep in mind that the evaluation process is still ongoing and making the right decision about the equipment’s suitable place later on.

Colour coding

Another way to simplify the visuals is by using colour codes. For example, all drilling equipment might have a green sticker on them that matches the colour of the shadow board. So it makes finding the right place for the drill bits even easier when nearby different tool holding boards.

Of course, the coding can apply to many different things, including inventory areas (shipping, stock, tools, etc.), dangerous zones and others to minimise confusion in the working facility.

The post 5S System in Lean Manufacturing appeared first on Fractory.

Interestingly, the above two goals are also the core objectives of lean manufacturing. Lean manufacturing aims to reduce seven different types of wastes in manufacturing. Addressing them helps streamline the process and increase productivity while reducing costs and preventing incidents, accidents, and near misses.

It suggests seven production concepts and tools to improve our processes. One of the lean manufacturing methods is poka-yoke. Poka-yoke is a Japanese term that means mistake-proofing. It aims to reduce the number of defects as well as incidents that occur due to inadvertent actions taken by humans when working.

Initially, the Japanese developed this technique for manufacturing but due to its versatile nature and the need for mistake-proofing, it soon found its way into many other industries.

Origin

The poka-yoke technique originates from Japan. An industrial engineer by the name of Shigeo Shingo developed this method while working at Toyota. He developed the guidelines to detect the defects at the source as well as methods to rectify them.

The technique first caught the attention of the West in 1990 when Womack published his classic management book “The Machine That Changed the World”. It was the first book to introduce the Toyota Production System (TPS) to the world. They described the lean systems of Japan in comprehensive detail. 

They also compared the lean manufacturing system with the mass production model put in use by General Motors at the time and predicted that the former production system would be more successful in the long run. In the 90s, Toyota was half the size of General Motors. Eventually, it passed GM as the largest automaker in the world.

What Is the Poka-Yoke Technique?

As discussed, poka-yoke means mistake-proofing, or sometimes described as foolproofing. In this technique, the engineers anticipate the kind of mistakes or defects that may occur in the manufacturing process as well as during the product’s use and install preventive measures in the process/product to prevent them altogether.

In other words, poka-yoke is a type of quality control with the aim of ensuring that all parts function properly.

A common example is how an interlock is built into top-load washing machines to prevent rotational movement while the lid is open. Or how, in front-loaded washing machines, the door can only be unlocked when the wash cycle is completed.

Similar devices are built into almost every machinery to prevent unintended use. They may also prevent mistakes in manufacturing by eliminating the possibility of making that mistake or alerting the responsible person about the mistake and initiating corrective action.

This reduces the number of defective parts produced, reducing costs and improving profit margins.

When to Use It?

Poka-yoke aims to reduce human errors wherever they could occur. This means there is a need for it in practically every industry. The solution to each problem is different. We can prevent such mistakes by following a set of guidelines that help us to find possible solutions.

But before we get to these guidelines, let’s see when and where can poka-yoke really make a difference to our processes and products. When we boil it down to the basics, three types of causes lead to mistakes.

1. Faulty memory

Faulty memory can cause a person to forget important steps in the production process and cause the following types of mistakes.

Missing part

During the assembling phase, the employee may forget to insert a part that should be in the final assembly.

Missing step

Faulty memory can cause an employee to miss a process step such as removing a part, pressing switches, or recording measurements.

2. Wrong perception

Sometimes, errors may arise due to an incorrect assessment of the situation. Examples of such errors are using incorrect parts or material quantities, wrong interpretation of procedures, and incorrect evaluation of dangerous situations 

3. Incorrect execution

When there are lapses in execution, it can cause errors and lead to defects. Some examples of such errors are as follows.

Setup error

This refers to errors in setting up the machine and jigs/fixtures correctly for the workpiece.

Operations error

This type includes mistakes made in step execution. Either the operator performs the step incorrectly or in the wrong sequence.

Errors in measurement

Incorrect measurement of part dimensions.

Use of incorrect parts

When the wrong parts are used in the process.

The use of poka-yoke aims to reduce or eliminate the mistakes above by not allowing the person at hand to proceed without taking all the necessary steps.

For example, you may not be able to assemble the final product without putting all the pieces in the right order (missing part). Or sensors prohibit starting the machine if everything is not in place (setup error).

Pretty much every problem has a way of fool-proofing, meaning that human mistakes can be brought to a minimum.

Guidelines for Applying Poka-Yoke

The above errors are avoidable with the right poka-yoke technique in place. The following process steps must be followed to address them.

Problem analysis

This step entails problem definition and analysis. After identifying the operation or process, we start the investigation for the cause of the error.

An error or defect usually has two types of causes – an immediate cause and a root cause. Sometimes, there may be more than one root cause.

It is imperative to trace the cause all the way to its root. Eliminating this will usually take care of many possible problems at once.

A good method to find the root cause is to use the 5-why approach suggested in the DMAIC methodology of Six Sigma.

Generation and assessment of solutions

Once we are aware of the root cause, we can look for possible solutions.

We can choose from various poka-yoke approaches such as installing interlocks to prevent further operation on detecting an anomaly (control approach) or bringing it to the responsible person’s attention (warning approach).

Implementation

Once we have selected the technique, we implement it in the system and measure its effectiveness.

We must set expectations from the implemented measures and if the measures meet those expectations, we conclude that the measure was a success.

With the right implementation, we will be a step closer to our ultimate goal of zero errors/defects.

Poka-Yoke Principles

There are two principles that prevent defects in finished parts. Either we can detect the parts with the wrong specifications before they are collected with the remaining finished parts or we can prevent the defects from occurring in the first place.

Both methods are used in the industry after comparing their relative feasibility.

Defect detection

In this method, we employ measures after the process is complete to detect the defective products and separate them from the good ones. The measures depend on the process but the one golden rule is that they should be as simple and inexpensive as possible.

Some of the devices we can use are:

• Vision system
• Electronic sensors
• Contact devices such as limit switches, microswitches, and fixtures
• Non-contact devices such as pressure sensors or LEDs

These devices help us inspect the final product for defects. The system then either stops the process and notifies the person in charge or segregates the defective product for later review.

Defect prevention

In this method, we eliminate the root cause to eliminate the chances of the defect occurring. In some cases, the system will prevent the defect from occurring and notifies the operator.

Preventive devices are placed at positions in the assembly line where the mistake can occur. Some of the devices that are usually employed are as follows:

• Vision systems
• Pressure sensors
• Limit switches
• Photoelectric sensors

These methods are preferred over the detection method wherever possible as prevention can reduce wastage besides preventing defects. But in cases where the cost of prevention far exceeds the cost due to wastage and detection, the latter is preferred.

Different Types

The above goals of preventing and detecting product defects are crucial to achieving a zero-defect rate. We achieve these objectives by using the devices mentioned in defect and error prevention in actual techniques that we then embed into the system.

There are three types of poka-yoke:

Contact method

In the contact method, we measure the part’s physical attributes (size, colour, finish) and geometry using sensors. This type of mistake-proofing is used in settings where there are environmental constraints such as inadequate illumination, poor visibility (due to dust, sparks, etc.), critical temperature, etc.

It is also a good method for circumstances where there is rapid repetition or intermittent production.

When it comes to designing products, the contact method refers to adding asymmetrical appendages or modifying the part design in a way that restricts the use of the product in only one orientation.

Good examples include different charging cables, where the asymmetrical ends allow fitting the cable into the charging port in a single orientation only.

Although it all seems very simple, there are still some pitfalls to be aware of. The video below illustrates how a little bit of creativity can nullify your efforts in the engineering room.

Poka Yoke Gone Wrong

Fixed-value method

When the operator needs to repeat the same action multiple times, we use the fixed value (constant number) method. In this method, we fit a counting device that helps the operator keep an accurate count at all times.

We fit a device that can control the number of actions such as the number of moves, length of movement, rates, etc. Some systems alert the operator when the count is reached.

In other cases, an operator will be given only the amount of components required for the assembly to avoid mistakes. For example, if an operator requires four bolts to assemble a component, he gets only four bolts in a box.

Motion-step method

When a task has multiple steps and there is a chance of skipping them by mistake, we use the motion stop method. It also prevents the operator from performing a step that is not part of the process.

The simplest example of a motion step method is a checklist. The operator is provided with a checklist with the tasks written in sequence and the operator can complete a job in the right manner by following the checklist.

Examples of Poka-Yoke

Poka-yoke technique is such a useful and effective technique that it pervades every aspect of our life today. There are many poka-yoke examples both in manufacturing and out of it. Let’s take a look at some of them.

Manufacturing industry

Poka-yoke techniques are used to create a safe and error-free work culture on the shop floor. Some of these techniques are as follows:

• Shutting off machinery when the guard is not in place.
• Removing metal pieces using magnets in the food processing industry.
• Alerting the operator when components are missing in an assembly.
• Detecting abnormal objects (safety equipment such as safety glasses) on the assembly line and generating an alert.

Automotive industry

Modern vehicles are full of poka-yoke applications to prevent life-threatening situations and keep the user as well as the pedestrians and nearby vehicles safe.

Some features using poka-yoke are:

• The necessity for the car to be in ‘park’ or neutral position before starting.
• Lane-keeping assist feature to maintain the car in the lane when the driver is non-responsive.
• Seat belt warning if not already fastened as soon as the car is in motion.
• Alerts in case doors are open when the engine is running.
• Automatic braking system.

Around the house

Many products in our homes come equipped with poka-yoke features to prevent incorrect use. Some examples of poka-yoke error-proofing are as follows:

• Devices such as microwaves, washing machines, dryers, and dishwashers will not start unless the door is closed.
• Electrical plugs have the earth pin longer than the other pins to prevent connection in the wrong orientation.
• Sinks have outlets to prevent overflow.
• Child-resistant tops on pill bottles and chemical containers to prevent accidental ingestion.

Conclusion

Evidently, traces of poka-yoke can be found everywhere around us, both at work and at home. This lean manufacturing method brings along a high level of safety for equipment use by preventing accidents from happening.

At the same time, it can be a very effective way to reduce waste in the industry. Applying different measures along the assembly line and throughout the manufacturing process can significantly reduce the number of human errors.

While Shigeo Shingo brought poka-yoke idea to the forefront of quality control a long time ago, there are still a lot of processes that can benefit from its application. While customers can enjoy safer products, shop managers can deal with fewer issues at work.

One of the keys to poka-yoke’s effectiveness is its down-to-earth logic which means that the solutions to increase efficiency do not always have to be high-tech. Often, very simple modifications can have a big overall impact.

Just a little bit of common sense and creativity can go a long way.

The post Poka-Yoke in Manufacturing appeared first on Fractory.

Concurrent engineering is another such example which, like lean manufacturing, derives from Japan. The biggest difference of the two from the origination stand-point is that concurrent engineering was developed solely through engineering practice rather than theoretic ideas.

The concept itself is a few decades old but improvements are being added all the time to raise the efficiency. Let’s see what this practice entails in order to increase profitability and reduce waste.

What Is Concurrent Engineering?

Concurrent engineering or simultaneous engineering is a discipline of integrated product development whereby all the life cycle aspects of a single product are considered simultaneously right from the start. Even at the conceptual phase, engineers are already working on solving everything possible that comes after the product launch.

In concurrent engineering, the various stages in product design (from conception to after-sales support) are approached and analysed, discussed and optimised at the initial stage to prevent undue wastage of time, effort, and money in the long run.

For example, while the design engineers are finalising the product design:

• The marketing team can start creating ad campaigns
• The sales team can create suitable pitches
• The manufacturing team can choose the appropriate production methods
• The supply team can start optimising methods of delivery
• The support team can create the infrastructure for installation and post-sale support

Sequential vs Concurrent Engineering

For comparison, let’s outline the strengths and weaknesses of the traditional sequential engineering method. This systematic approach dictates that only after finishing one stage, the product would be sent to the next stage.

The process is also known as “over the wall” approach as each department completes the assigned task and passes it over a hypothetical (or actual) cubicle wall.

With simpler products that don’t require much collaboration and communication, this method works well. The sequential engineering method is also easy to track. Bottlenecks and underperformers can be easily picked out and rectified. A highly complex product line was made simple, fast, and efficient.

But issues always arise. If one of the departments makes a mistake in their assigned task, the product would be sent back over the wall for rectification. This is known as ‘reverse flow’ and is one of the major reasons for its inefficiency.

Elements of Concurrent Engineering

Over time, as products became more and more complex, some of these walls came down naturally due to necessity. More collaboration in product development became imperative to avoid errors that could prove expensive if allowed to occur.

Gradually, as the benefits of this new method became more apparent, smart companies started actively pursuing ways to develop it. Overall, concurrent engineering can be divided into three main elements: people, process and technology.

People

People form the backbone of any organisation. Choosing the right design team at the initial stages of product design concept generation is of paramount importance. The product development in concurrent engineering necessitates that plenary meetings be held of people from different job functions.

The multidisciplinary team meetings are necessary to reduce development time and improve overall product quality. The right team will have a certain set of qualities that promote co-operation, sharing and trust.

Information and feedback sharing by employees must be a regular part of all meetings. Any changes in design or tolerance limits must be conveyed to all concerned departments at the earliest.

The people have to be open to criticism and quick changes. Bringing in different departments at an early stage means that ideas that are knowingly not ripe for production are open for everyone to comment and make suggestions on.

Process

The process is the most important element in concurrent engineering. It defines the different product development stages that must be achieved in order to reach the end goal. Each stage is then further divided and optimised.

As every product and organisation is different, the general philosophy of concurrent engineering must be moulded to fit the project at hand.

Even the most qualified design team will become ineffective and confused if a well-defined process is not put in place. The process refers to the group of different methods used to reach the common goal of the organisation.

The different processes should be capable of functioning in sync so that relevant job functions can keep each other updated about developments and discuss problems should any arise.

Some of the processes that need to be determined are:

• Workflow management and project planning processes
• Quality Function Deployment (QFD) – for translating customer needs to appropriate technical requirements at each development stage
• Design evaluation parameters and methods
• Failure analysis and design modification

Technology

As concurrent engineering requires much more communication and collaboration than the traditional methods, new technologies are necessary to enable and encourage information sharing. There are many amazing technologies available that promote collaboration and instant information sharing.

Any changes requested by a department will be notified to other pertinent departments. The relevant departments, through these technologies, can then collectively assess the impact of these changes on the final design. Alternate iterations can be suggested and easily compared and analysed. Some of these tools are:

• Rapid prototyping technologies
• Project management software for integrated product development
• 3D CAD/CAM tools
• Tools for FEA
• Communication and collaboration technologies
• Failure mode analysis tools

Why Use Concurrent Engineering?

The three most important factors that affect the market share and profitability of an organization are product quality and design, unit cost, and manufacturing lead time. Concurrent engineering (CE) helps companies achieve a competitive edge by improving every one of these factors. Let’s take a look at how this is achieved.

Highly Innovative Solutions

Many times, the skills of employees from different departments overlap. An engineer responsible for shop floor efficiency might have a good eye for aesthetics. A sales executive could have beneficial knowledge regarding design changes that can boost demand from a specific demographic.

Sure, a person whose speciality is in solving a particular issue will have great solutions but since the problem is open for all to see and ponder solutions, valuable input can be obtained from employees who are directly or indirectly affected by it.

Cross-discipline meetings take advantage of this fact to identify possible issues and brainstorm solutions that are mutually acceptable. This prevents big mistakes later in the production line, ultimately saving time and money through open information sharing.

Most Modifications Occur in the Initial Stage

Concurrent engineering is developed to identify and resolve issues early on. Every single stage from market research to after-sales support is discussed in the beginning to see how it fits together.

A large number of iterations take place at this stage. These iterations reduce scrap production, minimise the number of future changes, reduce manufacturing lead times, and practically give us the final product control characteristics.

Sequential engineering, on the other hand, goes through few changes in the initial stages while many more changes are almost inevitably required later to improve efficiency. These changes have a large impact on the time it takes to bring a new product to the market.

Decreased Risk of Loss

As almost all teams are involved in multiple facets of the product development process, there is more overlapping. More than one person has the necessary information about the new product and its life cycle.

Therefore, losing a single employee does not bear a large risk on the overall success of the project. Also, adding new members is easier because of the free flow of information.

Shorter Time-to-Market

This is probably the biggest win concurrent engineering has to offer. By working on many facets of the project simultaneously, there is a lot of time to be saved. This can result in a significant advantage over competitors through entering the market with a new product earlier.

Challenges of Concurrent Design

In order to successfully implement concurrent design, one needs to know about the challenges that come across product managers. An adequate understanding of these barriers can help reduce or completely eliminate them. When it comes to concurrent engineering, the two main barriers are organisational and technical.

Organisational barrier refers to the management style, values, and culture. These can be improved upon with sufficient training of the workforce.

The technical barrier refers to the lack of technological resources for effective data sharing and communication. The following challenges need addressing in order to successfully implement concurrent design:

• Workforce training and skill development
• Insufficient support from management
• Impractical schedules
• Unreasonable reward systems
• Lack of IT tools
• Inufficient knowledge and expertise in concurrent engineering application
• Lack of proper coordination among team members

Tips for Implementation

A great thing about concurrent engineering is that any organisation can start implementing it right away. All that’s needed is more inclusion.

When a new project is starting, invite the entire product development team associated with the project. After the first meeting, for every follow-up meeting regarding project specifics, invite all the concerned departments that have a stake in the meeting’s outcome.

Tools for communication and data sharing must be gradually introduced so that everyone is on the same page when it comes to any new developments in the product design. Any problems arising in different departments must be identified early on and discussed in general team meetings to find feasible solutions.

Common Misconceptions

There are a few reasons why companies are reluctant to adopt concurrent engineering principles. While some of the reasons are definitely valid, we bring out the common misunderstandings regarding the concurrent design and engineering discipline that halt adopting this method.

Everyone Must Attend Meetings All the Time

This is not true. It is prudent to call only those employees whose work will be affected by the agenda of the meeting. Of course, it is also wise to include employees whose experience and expertise in their field could provide valuable input and steer the meeting towards a more beneficial outcome.

Individual Job Responsibilities Don’t Exist

Individual job functions still exist and a person is responsible for doing the assigned work. People will only be collaborating more often and all team members will provide input during the decision-making sessions.

No Sequence to Things

Concurrent design does not obviate the need for sequential product development. Concurrent engineering states that if tasks can be done simultaneously, they should.

Obviously, we cannot design repair kits for a product before finalising the product design itself. But we can start designing the repair kits before the product is fully designed. Wherever practical, tasks must be carried out concurrently but some tasks will naturally have to be completed before others.

Conclusion

While concurrent engineering (CE) was initially conceptualised for the manufacturing industry, its use has recently been extended to the development and maintenance services as well.

The systematic approach in simultaneous engineering promotes the use of integrated product development methods. These methods are known for promoting innovation.

Getting a new product right the first time with a short time-to-market duration is a hallmark of concurrent engineering. It is a robust philosophy that invariably improves the overall product quality despite the many challenges to its successful implementation.

The post Why & When to Adopt Concurrent Engineering? appeared first on Fractory.

Michael Mandel’s Forbes article about manufacturing platforms brings out many perks of having manufacturing on the cloud. He sees it as the next step in the manufacturing industry.

How does it actually help the users and why is it considered the future of the manufacturing sector? Let’s see.

What Is Cloud Manufacturing?

If the term “cloud” gives you a headache, let’s try to define that.

The definition of “cloud computing” is the practice of using a network of remote servers hosted on the Internet to store, manage, and process data, rather than a local server or a personal computer.

The same principles of shared information are at use with cloud manufacturing. It is a service-oriented business model to share manufacturing capabilities and resources on a cloud platform.

In simple terms it means that people can visit a website to order their manufacturing, while the production is not limited to one company only. All the necessary info about manufacturers is available on the cloud.

This creates a model where several companies are sharing their capabilities with those website visitors.

At the same time, these platforms are not just mediation services. They offer possibilities to reduce environmental impacts and cut down costs by making intelligent decisions.

Today, we see such manufacturing platforms offering services for sheet metal fabrication, 3D printing, CNC machining, etc.

The Objectives

The main reason for the growing popularity and belief in cloud manufacturing is its sustainability.

Whereas the demands for lower environmental impacts and costs are growing, many are seeking for solutions in the realm of on-demand manufacturing. And cloud manufacturing’s aims align well with those needs:

• Enhanced efficiency
• Reduced production costs
• Optimal resource allocation

Features and Benefits of Cloud Manufacturing

How are these goals attained, though? For that, we shall take a closer look at the key characteristics of cloud manufacturing.

Flexibility

Depending on the manufacturing platform, cloud manufacturing offers a large variety of capabilities at one place.

The manufacturing of parts is assigned to the nearest manufacturer who has the expertise to execute the job. Thus, the supply chains are highly configurable and not fixed, minimising the reliance on certain connections and partnerships.

Also, the automated system’s capability of choosing a production partner based on those qualities accounts for achieving lower costs and lessened environmental impacts through shorter delivery distances.

Production Quality

Quality is one of the key aspects customers look for in manufacturing. Finding great suppliers is not always an easy task though.

Some cloud manufacturing platforms just try to get as many partners on board as possible. Others do their due diligence and send in a bunch of test orders first.

This helps to ensure great production quality without having to go through the pre-vetting process on your own.

Shared Accounts

The access to procurement information is available for anyone involved. While legacy workflows include back-and-forth emailing, the information is not readily available for every related person to see.

With manufacturing platforms, any involved party has an overview of progress. This lets a team of several members work on a project at once without the need to constantly keep each other updated.

Instant Quotes

The ability to receive instant quotes for CAD models or drawings enhances efficiency and offers optimal resource allocation. Less time is now spent on communication and making engineering drawings. Engineers can direct their efforts towards value-adding activities.

All the while these intelligent systems are accruing data to optimise the pricing process further.

Manufacturability

Giving out instant quotes needs a complicated system able to assess the uploaded files. This also means that the platform should not give out quotes for parts that are impossible to manufacture.

Assessing manufacturability takes the geometric dimensions into consideration. A price is displayed only if the assessment is positive.

At this stage of development, cloud manufacturing platforms still have some limitations. So the answer to the above-mentioned question may not always be final.

Combining the answers with logical thinking, a client can use this assessment for redesigning the parts if necessary.

Sharing the Load

Cloud manufacturing helps to keep the lead times low by distributing work evenly.

An example:

A person orders 1000 parts. Manufacturer A has the capabilities to perform it but the production is full for the moment.

The info about availability is on the cloud.

Then we have manufacturers B and C who are also partners. Although neither of them has the capacity to perform the job on their own, the order will be divided between the two.

This way the order can be sent to production without waiting for manufacturer A to finish his current job.

Such work would be tedious manually but simple for an always-informed manufacturing platform.

Service Oriented Manufacturing

Manufacturing is usually production oriented. This means that the companies providing the services are only focusing on one aspect of the process.

Cloud manufacturing is looking to change that by offering resources and capabilities at the same place. Also, many manufacturing platforms take care of the delivery of the goods instead of leaving that to the customer.

Such a step forward leads to a more compact and easier-to-manage solution.

Volumes as Leverage

Cloud manufacturing platforms can accumulate large numbers of orders, making them valuable partners for production companies.

Such volumes make a great leverage in bargaining cheaper prices.

Manufacturing platforms often use pay-as-you-go model for profiting, adding an extra % to the final cost. Still, with their initial discounts, the final price for the customer is better than they could negotiate on their own. And this applies to cases where they could find a similarly-priced manufacturer in the first place.

Often, small orders are also accumulated to make up a large one for better material usage. Less scrap is another way to achieve better prices.

Capabilities

Extensive partner networks ensure the possibility to produce a large variety of parts.

Gathering a lot of manufacturers with different expertise and machinery under one name, the customer can get hold of the best equipment without much hassle.

Cloud manufacturing platforms have the data about possibilities and limitations. Thus, they can direct jobs to relevant partners only.

Fewer Points of Failure

As stated before, cloud manufacturing encompasses all steps from quoting to delivery. Therefore, there is only one point of contact.

This means that the responsibility also lies with one company and dealing with reclamations, delays, etc. is that much easier.

Short Go-To-Market Times

Having the possibility to quote and send parts to production without first establishing connections in the industry makes short go-to-market times possible.

For rapid prototyping, iterations and first full products, cloud manufacturing is the perfect answer.

The same applies to on-demand manufacturing.

Only for large-scale production, it makes sense to really push for a large procurement department with the sole responsibility of securing the best deals. Volume is the key here and gives the possibility of negotiating even better prices on your own.

Keeping the Focus

The key cloud manufacturing provides, is the one unlocking more resources.

At SMEs, the responsibility of finding manufacturers often rests with design engineers. Outsourcing this obligation to a 3rd party leaves more time for the engineers to provide better solutions.

The features and benefits of cloud manufacturing strategies align with the evolving landscape of procurement transformation, enhancing efficiency and adaptability in production processes.

Who Is Cloud Manufacturing For?

Cloud manufacturing may sound intimidating because it’s new. Our experience with constantly growing complexity in tech creates associations with steep learning curves.

With cloud manufacturing, the contrary is true. The systems are very easy to navigate and make sense of.

Therefore, it does not need a lot of resources even in the first steps. The simplicity makes it suitable for a variety of people in need of manufacturing services.

Businesses

This is especially true for SMEs. Large corporations with high volumes can probably get greater discounts working on their own.

For SMEs, outsourcing this job makes a lot of sense. They don’t have the production volumes to negotiate for lower prices. Manufacturing platforms can use this leverage for them.

Bespoke solutions are the not the future any more, they are the present. With each job requiring new prices, it can amount to a lot of work. Instant pricing helps these companies to stay competitive with cost-efficient procurement processes.

Also, prototyping a few parts can be difficult because many manufacturers just reject such jobs. Cloud manufacturing platforms add those parts to larger orders, thus keeping the final price lower.

Starting Entrepreneurs

As we talked before, cloud manufacturing clearly reduces the go-to-market times.

Someone with an idea can now bring it to life without having any previous industry connections. They can still find their way to the best pre-vetted manufacturers nearby or faraway, depending on the final delivery destination.

This also makes it possible to, for example, start selling your products world-wide from the get-go. Setting up an online shop is the easy part. Now there is no need to build up a large stock and start transporting those things from the warehouse.

Make them nearby your customer and give up on renting a warehouse. This already covers the slightly higher costs of lower-volume production while mitigating the risk of holding large quantities in stock.

Engineers

So of course this applies to engineers who have to take care of manufacturing outsourcing working at the aforementioned businesses.

But there’s another side to it.

Any engineer who focuses on providing great results with low costs can now apply the pay-as-you-go system without “going anywhere”. The quoting system is free to use and helps them optimise the design for cost when comparing materials, thicknesses and different layouts.

Hobbyists

Hobbyists find pretty much the same perks with cloud manufacturing as starting entrepreneurs. Many need only a few pieces for a model plane, a new outdoors BBQ or a doghouse.

They can now turn to someone who can definitely assure quality for only a small one-time order.

Interested in testing such a platform? Sign up for free and start uploading your files for instant pricing!

The post What Is Cloud Manufacturing? And Who Can Benefit From It? appeared first on Fractory.

While buying your own equipment may seem like a good solution, it’s often difficult to justify it when looking at the ROI. However, many are willing to take the plunge just to avoid setbacks in the production phase when a client is waiting.

This is why we would like to give some pointers regarding the choosing process of sub-contractors. Good sub-contractors help with:

• Minimising delays
• Reducing costs in manufacturing
• Reducing inefficiencies
• Increasing productivity
• Boosting customer satisfaction
• Mitigating risks
• Developing a positive reputation in the industry
• Increasing ROI
• Decreasing redundancies
• Automating basic tasks

All the aforementioned positive impacts of well-chosen partners mean that the selection process should be quite analytical.

Our advice is especially aimed at mid-size companies looking for partners in producing a variety of projects, not serial production. The process of pinpointing suitable candidates includes such attributes:

• Capabilities
• Financial strength
• Fit for size
• ISO standards
• Communication
• Pricing
• Speed of quoting and delivery (capacity)
• Test order quality
• Trustworthiness over time

1. Capabilities

The first step is identifying a manufacturer’s capabilities. Not everyone has a web page that allows you to access that info in a clear and understandable fashion.

However, this does not mean that good fabricators are only limited to ones with a proper online presence. So don’t be deterred by that. Meeting interesting companies at expos and through word-of-mouth are also ways to discover new manufacturing sub-contractors. Just send them an email asking about their capabilities.

You can include an Excel template to get a clear overview and avoid misunderstanding about what you are actually looking for.

Capabilities include both the machinery at a company’s disposal and their willingness to accept different jobs. While some only focus on large orders and are never interested in manufacturing only a few parts at once, others may not have the capacity to execute series production but are well-suitable for your prototyping needs.

2. Financial Strength

This is something we check and would advise you to do the same. The info about a company’s revenues is readily available online. Take a look.

Bad credit is definitely a red light and points towards a possible point of failure, should you decide to include such a company in your supply chain.

3. Actual Fit

Would the two companies fit well with each other? Will the relationship work with the respective size and cultures of the two organisations? While huge manufacturing companies probably have the capability to produce pretty much anything, the communication may suffer.

Forming only a minuscule part of their revenue, it is common for large companies to leave the smaller customers hanging. Not all of them, of course. But it’s something worthy to take note of.

Are there potential conflicts, such as dealing with main competitors, or are any of the directors engaged in other companies that might compromise confidentiality?

Again, those conflicts are only potential. There is always the possibility to sign NDAs and other agreements that guarantee the security of your intellectual property.

4. ISO Credentials

Most manufacturers display their certificates right on their web page. Look for industry-related ISO standards that show some prowess in a field you are interested in.

For example, ISO 9001 is a common standard. It shows that a company adopts principles that strive for continuous improvement. Although it is not a guarantee, it is a sign of a forward-thinking culture. This is often reflected in the quality of service.

ISO 9013 ensures that your sub-contractor can provide certain quality cutting. Namely, it brings out dimensional requirements for different thermal cutting methods.

ISO 10204 shows that the materials used come from reputable suppliers. If you have done a FEA analysis and chosen the material accordingly, there should be no failure. Unless your supplier decides to earn some extra by changing the requested material against a cheaper one.

Although such shenanigans seem childish and unprofessional, they are not all that rare. That’s why it is also important to understand alternative material grades.

ISO 14001 focuses on a company’s environmental impact. A growing concern, it is relevant to many. And maybe also for your customers. So keep your eyes open for that one as well.

5. Communication with a Sub-Contractor

The next step is to gauge a supplier’s communication quality. The best way of getting any indication of communication skills is doing it online via email.

Why? Because that’s how you usually send your CAD drawings anyway. A good supplier is ready and checking for new jobs constantly. If your greetings email goes unnoticed for a few days and then comes back with a simple “Hey, what’s up?”, it’s a pretty good indicator of lousy communication. Some companies might even have a client portal set up to easily collaborate and communicate in real-time.

Integrating Supplier Relationship Management (SRM) practices can improve communication effectiveness. SRM advocates for clear and direct communication, focusing on supplier responsiveness, which is crucial in resolving issues and building trust and collaboration. This leads to stable and reliable supplier relationships, a critical aspect when relying on subcontractors for vital components or services.

It’s hard to over-emphasise the importance of communication in engineering. As production updates are mostly still given manually, you need someone you can rely on for information. Your client probably doesn’t accept “Sorry, I am not sure about the delivery date because of my sub-contractor” as a good excuse.

In this step, you should also ask about their capacity to take on more jobs as per your requirements. If the workshop is full all the time, there is probably no point in proceeding with the lead.

It is also vital to have open communication about where your supplier sources their materials and parts. Gaining deeper insight into your supplier’s suppliers is essential as it helps you to prepare for potential disruptions and adapt quickly.

6.-7. Speed of Quoting & Prices

So after you have established some interest from the other side and gotten swift responses, send in a request for price.

Choose something that you have manufactured before to compare the prices. Add parts from different materials into the mix and get separate quotes for each.

While a supplier may be bad with aluminium, it does not mean their prices cannot be good with stainless or structural steel. Therefore, getting one price for everything in bulk does not let you make a proper comparison.

If your quotes come in suspiciously low, there is probably a good reason for being suspicious. While the market varies quite a bit, someone lowballing the average by a large margin is probably doing something off. And it is usually visible when the first order comes back.

Carrying out a survey recently, we saw that half of the engineers wait 2 to 3 days for a quote. Of course, the time depends on the size and intricacy of the order. So consider this.

But overall, we think that a customer should not wait more than 24 hours for a quote. You can use the same sifting principle for picking your suppliers.

8. Test Orders

Start small. Even if you are left with a good impression, there is too much danger in forwarding a large bulk of parts you require on short notice to an unknown manufacturer.

There are probably two good options here. You either order some parts that you actually need but are not in a hurry with. Or something more complex to see how the manufacturer can handle the quality.

Quality is when the customers come back and the products don’t.

Aluminium cutting is notorious for leaving heavy burrs. Difficult bends are not achievable without the right press brake tooling. A quality finish for such parts may be a source of confidence for the supplier’s abilities.

9. Quality Over Time

If you are satisfied with all the attributes mentioned above – listed capabilities, ISO accreditations, financial stability, communication, speed of quoting, pricing and the quality of your test order – you are good to go.

Just be sure that you are constantly evaluating a sub-contractor over time. As we all know, things happen in engineering. A manufacturer hires a trainee and he is learning the trade of making your parts. A faulty part may somehow pass the quality checks.

Reclamations are, unfortunately, a part of the manufacturing industry. Just note when they happen and record how your supplier handles these cases. Is he trying to pin the blame on your poor drawings after initially accepting them as sufficiently well-done? Or does he take responsibility and find a quick solution to the situation?

There is probably no need to discard someone from your list of partners just for some hiccups. However, frequent accidents point to a larger problem that may stem from larger company-wide changes.

Then it is wiser to start the searching process again. After all, profitability does come down to numbers.

Why Trust Us?

Fractory has over 30 pre-vetted manufacturing partners internationally. While our platform allows the clients instant quoting for CAD drawings and models, the production side is left to our partners

As we take full responsibility for every step of the process – from quoting to manufacturing quality and delivery – we must have a highly optimised supply chain in place.

And we have seen over time that finding good suppliers is not always straightforward. After a great initial impression, the confidence quickly plummets when faulty products start rolling in. You can imagine how many companies we have had to go through to have 30 manufacturers on board.

Though we, of course, have some extra steps in the process in the form of different agreements and multiple checks, the process is roughly the same. And we are happy to share it with you.

Conclusion

Hopefully, this guide gave you some ideas on how to qualify potential manufacturing sub-contractors. Finding good trustworthy partners may not be simple but it is essential to achieve good quality products. After all, you can make the greatest CAD models but if they are not executed as per instructions, it means little. Our survey brought out some of the main issues with manufacturers today and those are not always easy to avoid.

If all this seems like too much work, you can always turn to Fractory for sheet metal fabrication. We have done the work for you to ensure quality manufacturing with short lead times. The cloud manufacturing platform gives instant quotes for CAD drawings and models, so the problem of waiting for days can be left in the past.

The post 9 Steps for Choosing a Manufacturing Sub-Contractor appeared first on Fractory.

This article describes some of the most common Lean Manufacturing techniques and tools. But first, let’s make sure we understand what Lean Manufacturing is.

What is Lean Manufacturing?

Lean Manufacturing or Lean Production is a series of methods that are based on the Toyota Production System created by Taiichi Ohno. First implemented in the 1940s and developed until the 1970s together with Eiji Toyoda. The term “lean” was taken from John Krafcik’s 1988 article “Triumph of the Lean Production System.”

The main objectives of lean manufacturing are:

• Minimise waste and costs.
• Maximise productivity and quality.
• Ensure continuous improvement.

These objectives are achieved by following the principles described by the Toyota Production System. They have now become synonymous with Lean Manufacturing principles and are applied all over the world by project management.

Lean Manufacturing Principles

These are the principles to follow when applying Lean Manufacturing:

• Maximise share of value-adding activities.
• Implement stable and standardised processes.
• Create a self-learning, continuously improving organisation.
• Take a holistic supply chain perspective.
• People development is the key success factor.

How to Apply Lean Manufacturing?

The first step is identifying what is known as the seven wastes of lean. The objective of Lean Manufacturing is to eliminate waste. These wastes are described by the Toyota Productive System as follows:

Transportation

This waste involves the unnecessary movement of materials or people within a process. It can result in production delays, handling damage and extra time that doesn’t contribute to productivity. Long transportation also impacts communication which affects the quality of the product.

Examples of transportation waste include:

• Temporary storage of work-in-progress (WIP) instead of moving the WIP to the next step
• Frequent transport of raw materials or parts within the factory due to poor layout

Inventory

This refers to the storage of raw materials, work in progress or finished goods. It usually means there are problems in the process that are hidden behind rising stock levels. This results in increased operational costs and production lead times.

To address these challenges and optimise warehouse space, businesses can explore the benefits of warehouse mezzanine systems offering an efficient solution to maximising vertical space utilisation within a warehouse facility.

Motion

Although seemingly similar to transportation, it is not the same. The motion refers to the unnecessary movement of people or machines within a process.

Some examples of motion waste include:

• Movement of people to fetch tools for a changeover process
• Movement of machine operators between different controls of a machine
• The necessity to stretch or bend over to complete a task

Waiting

This waste involves people or machines waiting for the completion of a work cycle. For example, waiting for raw materials to arrive, waiting for a process to finish or waiting for maintenance.

Over-Processing

Over-processing refers to waste related to an operation or process that is not necessary to meet customer demands. Examples of over-processing are:

• Producing to specifications tighter than the customer requires
• Unnecessary quality checks
• Performing operations that are not required to produce the final product, etc.

Overproduction

It means producing sooner, faster, or in greater quantities than customer demand. Over-produced items end up as inventory or scrap, thus creating more waste. Moreover, overproduction takes time away from value-added activities.

Some examples of overproduction are:

• Producing in larger batches to avoid changeovers
• Producing more than requested because of potential quality issues.

Defects

It refers to producing products that do not meet specifications. Examples of defect waste are:

• Re-working products because customer specifications are not met
• Delays due to re-adjusting equipment or processes until the product parameter reaches the target
• Scrapping defective products, etc.

These are the seven wastes of lean as described by the Toyota Productive System. However, some experts in the Lean Manufacturing field say there is an important eighth waste that must be considered. They describe it as human waste which refers to talent and skills being misused.

After these wastes are identified, it is time to put one or more Lean Manufacturing techniques into practice. Here are some of the most used Lean tools.

13 Lean Manufacturing Techniques

Bottleneck Analysis

There is an important practice in Lean Manufacturing, which is measuring processing times and flow times for each productive process. These times make it possible to calculate the process capacity in order to identify the bottleneck activity.

A bottleneck activity is something that limits the turnout of the process. After identifying the bottleneck, actions are taken to improve the performance of the activity, thus improving overall productivity.

Takt Time

Takt means “cycle” in German. This Lean Manufacturing technique helps to determine the cycle of production.

This time is calculated by dividing the time available in a period by the demand in a period. For example, 480 minutes of work per day (8h) to produce 2400 units results in a takt time of 480/2400 = 0.2 minutes.

By calculating this time, it is possible to align the pace of production with customer or market demand. As such demands are subject to change, takt time analysis can be considered a form of lean continuous improvement. Processes can be continuously optimised in response to live changes in demand. This usually results in a reduction of transportation, inventory, motion, waiting, over-processing, overproduction and defects. So all the seven wastes of Lean Manufacturing.

Batching

Batching, also known as cellular manufacturing, is another popular Lean Manufacturing technique. This lean tool looks at the optimal use of machinery to achieve a continuous flow in serial production.

For example, let’s say you are manufacturing 2 separate laser-cut parts for a series of machines on the same workbench. Batching means that those 2 parts should be produced in batches. Thus, you don’t need to set up the machine for each part every time. It has a significant effect on productivity. At the same time, it increases inventory, one of the wastes of Lean Manufacturing.

Batching is suitable when:

• The machine capacity is fixed
• The raw material is also in batches
• There is only one machine available that needs regular setup activities

Single Minute Exchange of Dies (SMED)

Depending on the type of industry, setups are often necessary to add flexibility to the production line. However, setups also waste a considerable amount of time. For example, changing tools in a press line takes a lot of time as they tend to weigh tons.

This lean manufacturing technique aims to reduce set-up times to less than 10 minutes by following these steps:

• Measure total changeover time
• Determine internal and external steps
• Move external steps outside of the changeover
• Shorten internal steps
• Improve external steps
• Standardise new changeover procedure

There are several benefits in applying SMED. It improves capacity, increases batch sizes without additional inventory investments, reduces overall process flow time and increases flexibility.

Total Productive Maintenance (TPM)

This Lean Manufacturing technique is an organisation-wide effort to reduce waste resulting from equipment failure, slower production speeds and defects.

The main objectives of total productive maintenance are to:

• Achieve maximum equipment efficiency
• Develop maintenance skills for all employees
• Increase equipment reliability
• Improve the efficiency of maintenance management
• Avoid unplanned machine downtime
• Optimise quality costs related to machine failure

Overall Equipment Effectiveness (OEE)

This is a key metric and tool to manage equipment-intensive production processes. It measures a system’s productivity

• How available a process is
• How fast a process is
• The quality of a process to produce defect-free parts

By doing so, the technique enables a systematic and detailed monitoring of waste. This includes wasted time and defects. Thus, it helps to identify small losses that may develop into significant losses over a longer time period.

Just-in-time (JIT)

It refers to producing only what is needed, when it is needed and in the needed quantity. One should enforce this throughout the production process.

Just-in-Time is one of the key elements of quantity control in lean production. But there are certain requirements, such as a very stable production system without excessive burden.

The main benefits include reduced inventory, reduced flow time, faster identification of work process problems, reduced waiting times and improved continuous flow.

Workplace Visualisation

This is a core technique of Lean Production. It consists of making all the important information about the workplace clearly visible and understandable.

Workplace visualisation includes what is done, how it is done, the current status, where things belong, etc. All this information is necessary to improve communication throughout the company.

Andon

This Lean Manufacturing tool is closely related to workplace visualisation. It involves using visual support and sometimes also audio alarms. Examples are screens to show production status, lights to draw attention to problems and other types of visual help to reduce waste.

The system encompasses a way to stop production to resolve a problem. The activation process can be automated or manual. For example, a worker may push a safety button to seize the production line.

Accumulated data about errors is then available for continual improvement in the workplace.

5S

5s is one of the most popular Lean Manufacturing techniques, it is also one of the tools to achieve workplace visualisation. The 5S are:

• Sort – sort through all inventory and remove unnecessary items
• Set in order – put all the items in the right place regarding functionality
• Shine – inspect all the machinery and maintain it regularly
• Standardise – standardised work helps to keep everything in order
• Sustain – make it a habit, so no one needs guidance

5S is one of the just-in-time manufacturing concepts that originates from Japan. This Lean Manufacturing tool is something more than just housekeeping. It is a systematic and sustainable method to organise the workplace.

The reduction of waste is achieved by maximising efficiency while improving morale and motivation.

Heijunka

This Lean Manufacturing tool is also known as levelling or production scheduling. Heijunka presents a different approach to normal productive process scheduling. The approach is to optimise the size of the batches in a batch production system. The goal is to achieve a continuous flow in production.

This is recommended when production needs to be very flexible and an even distribution of the delivery schedule is required. The main benefit is a reduction in lead times and inventory.

Companies with a steady influx of orders may adopt that method. Rather than producing 2 machines on Tuesday and 6 on Wednesday, it may be better to manufacture 4 on both days. Of course, this requires some previous data on order volumes.

Kanban

Kanban is the Japanese word for visual card. It refers to the use of visual cards to create a system of signals. Kanban improves the flow of materials and products in the factory and to the suppliers and customers. This helps to reduce waste from inventory and overproduction.

Today, many manufacturers are turning to electronic kanban solutions. It eliminates the problems such as manual entry errors and lost cards. IoT systems within a manufacturing plant are the Industry 4.0’s equivalent of the kanban method. They make for a great next step after seeing productivity increase through traditional kanban.

Poka-yoke

Poka-yoke is another Lean Manufacturing technique. The name derives from baka-yoke, meaning fool-proofing or idiot-proofing. The aim of this method is mistake-proofing.

A simple example of fool-proofing is the need to press the clutch when starting a car with a manual gearbox. This eliminates the risk of someone crashing a car just after ignition because it was already in gear.

Three ways to introduce poka-yoke for manufacturing:

• The contact method. Identifies mistakes and defects by testing a product’s physical attributes like shape, size, etc.
• The fixed-value method. A machine operator receives a message when the required number of movements are not made.
• The motion-step method. Makes sure if the correct steps have been made in the manufacturing process.

Looking to Start with Maximising Efficiency?

Choose any of the methods described above. You can start by implementing them step-by-step and see how it affects efficiency at the workplace. Lean Manufacturing methods are part of a larger picture to maximise efficiency at every stage of the product development process.

The ideas align well with concurrent engineering principles, so using the two hand-in-hand can have a substantial effect on the overall costs in terms of both money and time.

For engineering companies looking for innovative and efficient solution, we would also advise to look into cloud manufacturing. This helps to reduce the overhead costs related to procurement processes and does not need any investments.

The post Lean Manufacturing Methods appeared first on Fractory.

Manufacturing cost reduction is usually aimed at saving money through cheaper production. That’s the most obvious way – comparing different offers and choosing the lowest price.

The variety of possibilities is much wider. Well-known ideas for cost reduction in manufacturing are:

• Assessing your current costs
• Making assessment-based corrections
• Communication with workers to find more areas of optimisation
• Re-evaluating previous decisions
• Following ISO 9001 standards for continuous improvement
• Reducing energy consumption
• Automating processes that don’t need human interaction
• Minimise transport costs
• Reduce the time wasted on non-value work activities

We are taking a closer look at the last point. It is often overlooked because many of those activities are viewed as a part of the natural manufacturing process. But we have some new viewpoints to share with you!

Saving Design Engineers’ Time

So let’s get to my audacious claim first. £10,000 is a lot of money. What can you do to save this amount annually per engineer?

An engineer’s weekly workflow includes many steps. To simplify, an average project may take a week to accomplish from idea generation to making drawings. The last part – producing manufacturing drawings – takes about 20% of the allocated time. And this estimation includes a buffer.

Now, what would happen if you just didn’t have to make those drawings? You’d save 8 hours per week, which totals about 400 hours per year. In monetary terms, this equals the aforementioned £10,000 per year. And how to omit this crucial part of the engineering practice?

Fractory’s cloud manufacturing platform accepts STEP files as well as file types native to SolidWorks (SLDPRT) and Autodesk Inventor (IPT). Nowadays, all projects are first done as 3D models that can easily be converted into the universal STEP format. Uploading those to our platform gives an instant price quote. Therefore, there’s no more need for drawings.

And there’s no more need to spend 20% of an engineer’s time on that. How many engineers do you have at your company?

Comparing Different Designs

Good engineers follow these engineering tips to never rely on one solution only. Picking the best one comes down to functionality, reliability, aesthetics and price. The price point, so far, has been a rough estimation based on the engineer’s experience.

With automated quoting it’s easy to perform quick design to cost analysis, you can simply upload a few competing ideas and compare the prices. You’d be surprised by the results. A gut feeling often doesn’t come close to reality.

Discovering that a higher-value solution has a similar or even lower price compared to a lesser option demonstrates the effectiveness of integrating cost and value engineering principles. A simple example is a part optimised for weight, where numerous cutouts make it seemingly much costlier. It can often be so that those cutouts, in reality, add very little to the final price.

Cost Reduction Through Purchasing Manager

Saving Time on Quoting

Bending Quote Online

Every company that outsources its production has a procurement manager who takes care of the ordering process. They probably get 3-4 quotes from different suppliers before settling on one offer. This entails back-and-forth emails and calls. Let’s say getting each quote takes around an hour. That’s 4 hours in total, or £100 spent towards communication in wages.

If you know your suppliers, they probably give you quotes in a 15% range. With orders up to £1,000, this amounts to a maximum of £150 in savings. But getting those quotes cost you another £100.

This means that the cheapest option is £850 + £100 (time spent on getting offers) = £950. Fractory’s algorithms give you a competitive quote by only including suppliers that are able to provide reasonable prices for a particular job. Sometimes we’re at the lower end of the spectrum, sometimes at the higher. On average, you would get a price of £925, which still amounts to monetary profit + available time for value-adding activities.

Switching Tasks

Time loss occurring from switching tasks is difficult to measure. But there’s clear evidence that multitasking and switching tasks has a largely detrimental effect to productivity.

Therefore, having one supplier give you quotes vs getting many different has another perk to it. Keeping a “clean desk” helps with focus, resulting in better judgement ability and productivity.

Where Can I Manufacture This?

Although we started with getting quotes, the first step is actually making sure to find suppliers who can do the job for you. With simple 2 mm carbon steel cutting, you probably know where to turn to. But what if you need 20 mm aluminium cutting?

Our platform lets you choose between all the available materials. Every selection has at least a dozen suppliers ready to do the job. This amount of providers helps to ensure that we can offer a competitive price. And you don’t have to find anyone new each time your engineers have used a less common material.

Cutting Costs Through No Post-Processing

Are you usually paying extra for removing burr? Or do you just get a pile of sheets that need post-processing? Not with us. Your workers can now save time.

Fractory’s network of pre-vetted partners only deliver parts that come with a quality guarantee. Every cut metal part is burr-free. Sometimes it comes down to the bench operator’s expertise, other times deburring is simply necessary (e.g. thick aluminium parts).

The Cost of Hiring New Talent

There’s a clear shortage of new talent on the market. In all honesty, mechanical engineering is not the most popular choice among engineering career paths.

So we can turn back to means of saving time. Using your workforce reasonably and reducing the amount of wasted time should be a priority.

If you have 5 engineers, each of whom saves 20% of their daily time, 4 engineers can do the same amount of work. The extra time can be allocated towards actual engineering and designing. In essence, you have an extra employee available to focus on providing value, not drawings.

Hopefully, we managed to bring out some valuable ideas for any engineering company. If you have some advice we should include here, let us know!

The post Cost Reduction in Manufacturing – How to Save £10,000 per Engineer? appeared first on Fractory.