Recognizing Excellence in Manufacturing

Automation World has had an editorial stance from its inception to show manufacturers how the appropriate application of automation technology, combined with collaboration among the automation team, can make manufacturing more profitable and more competitive than ever before. In an era of prophets of doom and gloom, Automation World has reported from the front lines how real people are making a difference in their companies and in their communities.

From December 2004 through November 2005, the work of professionals from at least 36 companies has been detailed in the magazine’s pages, of which five have been selected for recognition in this article. Some have used software solutions, some, hardware technologies. Some were manufacturing engineers and others were from other manufacturing disciplines. The common thread: they had a vision of a better way to do things, and worked with people within their organizations and with people from various suppliers to accomplish their vision.

One key word is “appropriate.” It is never our intention to suggest that you should just throw money at a solution. Some managers have developed a sour taste about bringing technology into the plant, remembering excesses of the Y2K and dot-com eras. But professionals have found the balance of bringing in new technologies in a way that enhances key business performance indices rather than just being new toys for engineers. Hence, our stance on reporting real business benefits as often as possible. Each of the five applications recognized in this article had documented and quantifiable business benefits.

Look for more of this type of reporting in the future, and make Automation World must reading for tips on how to make your company more competitive. Or, better yet, let us tell your story of success.

Keeping Production at Home

To move production offshore or not? Despite tremendous price pressures in many industries from foreign competition, the answer isn’t always a foregone conclusion. This story from January 2005 shows how one company bucked the offshoring trend.

At Allen-Edmonds Shoe Corp., a Port Washington, Wisc.-based men’s footwear manufacturer, a focus on customers has engendered what some might consider to be an unconventional strategy. In an industry in which high-volume, low-cost, offshore manufacturing has all but wiped out domestic North American production—more than 98 percent of all shoes sold in the United States are now made abroad—Allen-Edmonds is bucking the trend.

Mark Birmingham, chief operating officer, says the company has so far opted to keep manufacturing at home, at factories in Port Washington, Milwaukee and Lewiston, Maine. The company plays at the high end of the market—its men’s dress shoes are priced typically at $200 to $400 or more at retail—and high quality is paramount. Birmingham says the decision to keep production here came after careful analysis of the company’s business model and the expectations of its well-heeled customer base.

Among other things, the firm concluded that sourcing shoes in a low-cost labor country such as China would reduce costs, but would also require an expensive doubling of finished goods inventory to cover the six to eight week lead times required to receive production orders. The long boat ride from China would also play havoc with Allen-Edmonds’ ability to quickly respond to changing market needs and customer requirements. Offshore production “completely changes your business model,” Birmingham says.

As part of its stay-at-home strategy, Allen-Edmonds recently spent more than $1.5 million to convert its main plant in Port Washington from a fixed assembly line to a cellular production system based on lean manufacturing principles. The result, says Birmingham, was a 20 percent to 30 percent boost in productivity, while damage rates have dropped by about 3 percent.

Quality a good bet at Kraft

Food and beverage manufacturers are under incredible pressure to deliver products that are profitable, and, just as importantly, conform to strict quality standards. As Walt Staehle, director of MES and Shop Floor Systems for Kraft Foods Inc., in Allentown, Pa., puts it, in a story that appeared in February 2005, “Food and beverage makers have the most intimate relationships with consumers. After all, consumers eat our products. How consumers respond to your brand will determine your success. Every day, they vote with their pocketbooks.”

As part of a broader Manufacturing Execution System (MES) initiative, Kraft launched a program called Manufacturing Quality Future State (MQFS). Says Staehle, “MQFS goes way beyond ‘Total Quality’ and ‘Quality Circles.’ ” At Kraft, MQFS is a joint manufacturing, quality and systems program designed to increase productivity while improving product consistency.

“For many years, people looked at productivity and quality as two separate things,” notes Staehle. “But when you look at asset management, you see that they are intertwined. Quality is the springboard to Overall Equipment Effectiveness (OEE).”

The four MES principles Kraft applied to the MQFS project are technology, information, education and ownership.

Choosing the right technology—the first principle—meant selecting tools that provide the right functionality at the right price. For the information principle, Kraft provides real-time data to those within the plant who can best use it to run the business. The third principle— education—means Kraft spends a good deal of effort training employees on how to use the new tools.

But it was the fourth principle—ownership—that posed the greatest opportunity for Kraft. Says Staehle, “Our biggest challenge was to prepare the organization to give employees the elbow room they needed to make decisions, and have them be confident in those decisions.” The MES projects are enjoying great success at Kraft, in large part because of the steps taken to ensure employee ownership.

How are the projects paying off? The MQFS systems are installed in 16 plants across 12 Kraft categories. The weight control systems are installed on more than 700 lines, and the common laboratory information management system is operational in 54 plants. To date, Kraft has invested about $30 million in capital and expenses, with an internal rate of return (IRR) of more than 30 percent, a 10 percent improvement in yield and an average 30 percent reduction in process variation. The cumulative savings for the programs total more than $32 million through 2004, of which $22 million are on-going annual savings.

Be thrifty with energy

Energy is like any other commodity. If you’re not thrifty with it, it will slip through your fingers, so to speak. And profits will suffer, as New Holland Tractor’s plant in Greater Noida, India, learned. As detailed in a story that appeared in March 2005, the fixed-speed motor on the New Holland plant’s compressor line ran continuously. It didn’t matter whether the paint shop, assembly line, utility room, machine shop and other areas in the plant were using the air or not. The motors kept running, consuming energy and shaving more money from profit margins.

To recoup that wasted energy and add it to the bottom line, management called M/S Elcon System Pvt. Ltd., a local systems integrator partnered with Rockwell Automation Inc., in Milwaukee. The solution was to install sensors and an Allen-Bradley 125-horsepower variable-frequency drive supplied by Rockwell. By adjusting the motor’s speed automatically for the demand, the variable-speed drive reduced the compressor line’s energy consumption by 35 percent, and paid for itself in about 13 months. “The realization of savings by controlling our compressors has been a remarkable achievement,” says Pawan Uppai, assistant manager and plant engineer at New Holland India.

Want a fast $60,000?

Scott Lampe, financial controller at Hendrick Motorsports Inc., in Charlotte, N.C., borrows from a current credit card commercial in an April 2005 story when he says, “Immediate savings from integrating AvantisPro with business operations—$60,000; reduced cash outlay for inventory within six months—$400,000; collecting accurate information to make informed decisions—priceless.”

On its 65-acre racing complex in Charlotte, Hendrick Motorsports builds race cars from start-to-finish for such noted NASCAR drivers as Jeff Gordon, Terry Labonte, Jimmie Johnson and Joe Nemechek.

“While reducing costs is certainly important,” says Lampe, “we’re here to win races and generate revenue. The Avantis asset management solution from Invensys enables us to collect the information necessary to make more intelligent decisions and optimize performance.”

The initial focus for Hendrick Motorsports was on inventory management, which is no easy task, considering there are 10 separate buildings on the Hendrick complex, each with its own inventory warehouse.

There are approximately 150 components on each car that are monitored by condition (when does component reach failure condition) or usage (cycles or revolutions of engine, laps of track and the like). Hendrick monitors these components on more than 30 cars of the racing team. Hendrick can track the configuration of the vehicle specified for the race and changes made during practice before the race. At the end of the race, there is a well-documented history of the vehicle configuration. This allows it to duplicate the configuration if the car finished first, or make necessary modifications if the car needs improvement. That’s not to mention the cost savings.

Bottle the savings

MES software is supposed to help a manufacturer execute. A well-designed MES application with automated connections to the factory floor can mean lots of extra dollars of net income. Such is the case at Southeastern Container (SEC), an Asheville, N.C., manufacturer of blow-molded plastic beverage bottles, whose story was told in the April 2005 issue.

SEC’s plant in Winchester, Va., manufactures plastic bottles used by beverage companies to contain and ship a variety of popular soft drinks. But it also manufactures the “preforms,” or test-tube-like plastic pieces, which are blow-molded into final bottle shapes. It uses a portion of its preform products for its own requirements and ships the rest to the company’s other blow-molding facilities.

An automated material handling system moves, cures and stores the preforms. The key component is an overhead crane system that transports materials. The crane’s control and information system created bottlenecks through downtime. Says Paul Jones, SEC molding operations manager, “The old system constantly presented us with trouble. It could not keep the blow-molding department supplied with empty bins or preforms, and it sometimes sent the wrong product.”

Interwave Technology, a Rockwell Automation business based in Milwaukee, developed a top-level control and inventory system for the overhead crane. The finished system has helped SEC increase product-ivity by around 2 percent, representing about $750,000 in added sales in the first year.

The company also saved more than $30,000 in material and labor costs in the first year and helped cut operating costs by $70,000 per year.

Included with the online version of this article at www.automationworld.com is a table listing all the finalists for recognition along with a link to the article for the full story. Automation World salutes those professionals who strive in the face of negative attitudes to continue to improve manufacturing.

See sidebar to this article: Automation World Recognizes Component Product Introductions

See sidebar to this article: Automation World Recognizes Component Product Introductions (sidebar)