Which resources are capable of supporting companies in meeting the challenge introduced in the previous section?
First of all, it is important to state that only re- sources relating to products (or services) and to pro- duction processes (i. e., manufacturing and assembly activities in industrial companies) are considered in this chapter. It is not the authors’ purpose to take into account some other factors associated with advertis- ing, marketing, or administrative areas.
In brief, research supports productivity via three fundamental and interrelated drivers: the product, the process, and the production system.
1.4.1 The Product and Its Main Features
Products are usually designed with reference to their performance (i. e., the ability to satisfy customer needs) and to the aesthetic appearance required by the market. Requirements derived from the produc- tion system are sometimes neglected, thus having a negative effect on final production costs. As a conse- quence, during the last few decades several strategies or techniques for product design, such as design for manufacturing (DFM) and design for assembly (DFA), which, respectively, consider manufacturing and as- sembly requirements during the design process, have
been proposed in the literature and applied in modern production systems. They provide a valid support to the effective management of total production costs.
In recent years, the matter of reuse and/or recycling of products has become extremely pressing world- wide, and many countries are facing problems relating to waste evaluation and disposal. The significance of these topics is demonstrated by the wide diffusion of product life cycle management, as the process of man- aging the entire life cycle of a product from its con- ception, through design and manufacture, to service and disposal. Figure 1.2 presents a conceptual model of the product life cycle, including the design, produc- tion, support, and ultimate disposal activities. Main- tenance of production facilities and recovery of prod- ucts explicitly play a strategic role in product life cycle management.
As a consequence, a product design process that also considers product disassembly problems at the end of the product life cycle has become a success fac- tor in modern production systems. This approach to the design process is known as “design for disassem- bly” (DFD). In several supply chains (e. g., tires and batteries) the manufacturer is burdened with the reuse or final disposal of the product, and DFD is a partic- ularly effective tool for the reduction of production costs. Section 1.2 discusses the advantages and dis- advantages associated with the production of a wide variety of products: wide ranges of product mix are an effective strategy in meeting customer expectations, but companies must reach this goal with the minimum number of components and parts.
In particular, any part or function not directly per- ceived by the customer implies both an unnecessary and a harmful addition of complexity because it is not remunerated. Research and trials examining this spe- cial kind of complexity lead to the formulation of the following production strategy: what is visible over the skin of the product is based on a very high degree of modularity under the skin.
The so-called product platforms are a good solu- tion to support product variability, and so have been adopted in modern production systems. Several fam- ilies of similar products are developed on the same platform using identical basic production guidelines for all “derivative” products. A well-known example is the “spheroid platform” developed by Piaggio (the Italian manufacturer of the famous Vespa scooter): the products named Zip, Storm, Typhoon, Energy, Skip-
Fig. 1.2 Product life cycle model
per, Quartz, and Free are all derived from the same underlying fundamental design of the scooter called
“Sphere” (hence the spheroid platform). Another sig- nificant example is the standardization of car speed in- dicators in the automotive sector: the manufacturers tend to use the same component in every product mix regardless of the speed attainable by each individual car model. As a result of this strategy, the range of the product mix is reduced and the management of parts is simplified without affecting product performance.
Every remark or comment about the techniques and strategies cited is also effective both in production sys- tems and in supply services such as hospitals, banks, and consultants.
1.4.2 Reduction of Unremunerated Complexity: The Case
of Southwest Airlines
Southwest Airlines has developed several interesting ideas for reducing complexity in the service sector.
Figure 1.3 shows the cost per passenger for each mile traveled with the main US airlines.
Two fundamental facts can be observed in Fig. 1.3:
since 2004 the cost per passenger for each mile traveled (extrapolated from available seat miles) for Southwest Airlines has been lower than for its com- petitors, clearly competing in the same market and over the same routes. Moreover, the available seat mile costs of Southwest Airlines have continued to decrease since 11 September 2001, in contrast to those of its competitors. Moreover, these costs have significantly increased owing to the increase in the cost of petroleum and owing to the introduction of new safety and security standards.
How can this be explained? The answer lies in the efforts of Southwest Airlines, since 1996, to reduce the variety and complexity of services offered to its cus- tomers but not directly perceived by them.
A significant analysis of the fleet configurations of major American airlines is reported in Table 1.3.
The average number of different models of airplane used by the major USA airlines is 14, but Southwest Airlines employs only Boeing 737 airplanes. In fact,
Table 1.3 Number of different models of airplane used by USA airlines (June 2008)
United Delta American Average for Southwest
Airlines Airlines Airlines USA airlines Airlines
No. of different models of airplane in fleet 13 9 6 7 1
Boeing 737
Fig. 1.3 Cost per passenger for each mile traveled. ASM avail- able seat miles. (United States Securities and Exchange Com- mission 2000)
in June 2008, Southwest Airlines owned 535 airplanes of this particular type but using various internal con- figurations, ranging from 122 to 137 seats.
Variety based on the type of airplane is completely irrelevant to customers. Furthermore, when a passen- ger buys a ticket, the airline companies do not commu- nicate the model of airplane for that flight. However, reducing the number of different models of airplane in the fleet directly results in a significant saving for the airline company: only one simulator for pilot training is required, only one training course for technicians and maintenance staff, spare parts management and control activities are optimized, “on ground” equip- ment such as systems for towing and refueling are standard, etc.
In spite of critical safety problems and high fuel costs, Southwest Airlines has been able to compete
very effectively. Among a great many original ap- proaches proposed during the last two decades for the reduction of complexity in a production system, the well-known Variety Reduction Program (VRP) devel- oped by Koudate and Suzue (1990) is worthy of men- tion.
1.4.3 The Production Process and Its Main Features
Production processes in several industrial sectors have recently been forced to undergo significant transfor- mations in order to ensure both cost reductions and high quality. A good example from the wood sector is the nonstop pressing process used to simplify the as- sembly process by using small flaps, gluing, and other techniques instead of screw junctions.
Every process innovation capable of consuming too many production resources such as energy, manpower, and raw materials is a very useful motivating factor driving research into productivity.
Consequently, when a new production investment is being made in a manufacturing or service sector, a benchmark investigation is required in order to check the state of the art of the production processes. In ad- dition to this, from an economic or technical point of view, scouting for alternative processes that could be more effective is also recommended.
1.4.4 The Choice of Production Plant
An effective production process is a basic condition in making an entire production system effective. Thor- ough analysis of the specific characteristics of produc- tion factors, e. g., resources and equipment required by the available processes, is one of the most important aspects of research into productivity.
It is possible to have two different production plants carrying out the same process with their own specifica- tions and production lead times to get the same results, but at different costs.
A great deal of effort in innovation of the plant equipment has taken place in recent years, but in- novation in the production process is a very diffi- cult problem to solve, often involving contributions from various industrial disciplines (e. g., electronics, robotics, industrial instrumentation, mechanical tech- nology). One of the most significant trends in equip- ment innovation developments is represented by flexi- ble automation, which provides the impetus for a pro- duction system to achieve high levels of productivity.
Presently, industrial equipment and resources are highly automated. However, flexible automation is required so that a wide mix of different products and services is achieved without long and expensive setups. One of the best expressions of this con- cept, i. e., the simultaneous need for automation and flexibility, is the so-called flexible manufacturing system (FMS). A flexible manufacturing system is
Fig. 1.4 Different kinds of manufacturing systems (Black and Hunter 2003)
a melting pot where several automatic and flexible machines (e. g., computer numerical control (CNC) lathes or milling machines) are grouped and linked together using an automatic and flexible material handling system. The system can operate all job se- quences, distinguish between different raw materials by their codes, download the correct part program from the logic controller, and send each part to the corresponding machine. This basic example of the integration of different parts shows how suc- cessful productivity in a modern production system can be.
The potential offered by flexible automation can only be exploited effectively if every element of the integrated system is capable of sharing information quickly and easily.
The information technology in flexible systems provides the connectivity between machines, tool stor- age systems, material feeding systems, and each part of the integrated system in general.
Figure 1.4 presents a brief classification, proposed by Black and Hunter (2003), of the main manufac-
turing systems in an industrial production context by comparing different methodologies based on produc- tion rates and flexibility, i. e., the number of different parts the generic system can handle.
In conclusion, the required system integration means developing data exchange and sharing of infor- mation, and the development of production systems in the future will be based on this critical challenge.
The current advanced information technology solu- tions (such as local area networks, the Internet, wire-
SELLING MARKET
• International competition
• Shorter product life cycle
• Increasing product diversity
• Decreasing product quantity
• Shorter delivery times
• Higher delivery reliability
• Higher quality requirements
LABOR MARKET
• Increasing labour costs
• Lack of well-motivated and qualified personnel MARKET DEVELOPMENTS
PRODUCT DEVELOPMENTS
• New design strategies (DFM, DFA, DFD,..)
• New materials
SYSTEM DEVELOPMENTS
• Flexible automation
• Integration
• Information technology RESOURCES
PROCESS DEVELOPMENTS
• Innovative processes
• New process strategies
• New joining methods
COMPANY OBJECTIVES
• High flexibility
• Constant and high product quality
• Short throughput times
• Low production costs
ACTIVITIES COMPANY
COMPANY POLICY EXTERNAL DEVELOPMENTS
• Effective system design
• Effective system management
Fig. 1.5 The new productivity paradigm for a production system. DFM design for manufacturing, DFA design for assembly, DFD design for disassembly. (Rampersad 1995)
less connectivity, and radio-frequency identification (RFID)) represent a valid support in the effective in- tegration of production activities.
Figure 1.5 is extracted from a previous study by the authors and briefly summarizes the productivity paradigm discussed in this chapter. This figure was proposed for the first time by Rampersad (1995).
Research into productivity also requires technical, human, and economic resources. Consequently, before a generic production initiative is embarked upon, it is
essential to carry out a feasibility study and an ap- praisal of the economic impact. At the design stage of a product or service, a multidecision approach is often required before the production start-up is ini- tiated. Moreover, as it involves a broad spectrum of enterprise roles and functions, an integrated manage- ment approach is achieved because brilliant design so- lutions can be compromised by bad management. The following section deals with the design, management, and control of a production system in accordance with a new productivity paradigm proposed by the authors.