IBM’s digital journey is keenly focused on building a cognitive enterprise that embraces an agile culture of innovation, combined with a client focus that leverages exponential technologies to deliver greater value. IBM executives on the MLC’s recent virtual tour of its high-end storage manufacturing plant in Vác, Hungary, described it as, “a mission of relentless reinvention.”
The April 2021 tour showed Manufacturing Leadership Council members how the company brings that mission to life to maximize its complex supply chain. And it is a complex one: IBM has an operational presence in more than 170 countries around the globe, with its manufacturing sites in strategic locations, serving hundreds of thousands of customers with hardware deliveries and service maintenance. To meet the high configurable product demand, the IBM supply chain operates in a hybrid model of build-to-plan and build-to-order. IBM also collaborates with suppliers across its global, multi-tier supplier network.
For IBM, the enterprise IT needed to drive rapid innovation is based on an Open, Hybrid Cloud and AI-embedded platform that incorporates the company’s own technology, including IBM’s Watson AI capability, to provide data insights as well as manage its supply chain on a daily basis. IBM AI technology has capabilities to co-create and manage business transformation through visual recognition technology, acoustic analytics, industrial augmented reality, IoT, blockchain, and digital twins, to power its infrastructure, elevate its automation capability, maximize equipment lifespan, and enable remote support.
But it also takes IBM’s team of passionate and committed supply chain professionals to apply these emerging technologies to operations with both speed and agility to achieve the company’s goal of relentless reinvention.
From piloting new technologies to becoming a more cognitive enterprise, automating core processes, and leveraging a multi-source more resilient supply chain, IBM is committed to the idea of innovating anywhere/use everywhere data insights to improve its processes, people, and technology.
Adopting Advanced Technology to Drive Digital Transformation
The Hungary plant tour exemplified how IBM combines collaboration and processes with automation, AR, AI, IoT, and data visibility to achieve a seamless, agile operation. Supported by the company’s Operations and Supply Chain Execution teams around the world, some of the key technologies IBM executives highlighted included:
Supply Chain Advisor: Being able to access forecast, order, supply, inventory, and engineer data in real time across all manufacturing geographies and functions is critical to the company’s decision-making process. IBM uses a platform powered by Watson and cognitive AI capabilities to provide instant data insights that its worldwide supply chain professionals can use to monitor and assess global and local supply and demand information, as well as parts numbers and component details. There are three main Advisor systems: Cognitive Supply Chain Advisor 360, Quality Advisor, and Test Advisor, which enables the IBM Supply Chain to mitigate potential issues before they reach critical mass and to adjust workflows as needed.
Collaborative Robots: The company also uses collaborative robots integrated with AI visual recognition to help maintain consistency in the quality inspection process, as well as precision in the assembly process. This allows employees to concentrate on more complex and higher value tasks.
Acoustic Insights: IBM infuses AI and automation into the acoustic arena as well. It trains AI models to recognize sounds that could indicate a potential machine failure so it can be mitigated before a failure occurs. Both of its visual and acoustic insight products were developed in house.
Augmented Remote Assistance: When the company had to minimize the physical interaction of employees due to COVID-19, it implemented an augmented remote assistance solution — a mobile app and web interface that workers can use to report problems to remote experts. The experts can then evaluate and provide step-by-step visual instructions through a live audio and video stream. This has streamlined response and repair times. Some manufacturing operations staff also are equipped with a tablet to facilitate collaboration and improve knowledge sharing through virtual interaction.
Blockchain: In the Hungary plant, IBM has used blockchain technology to track parts in collaboration with its suppliers throughout the lifecycle of a product. This makes it easy to track and screen for faulty parts, and that data can then be shared with suppliers. IBM also uses Blockchain for logistics tracking and customs clearance to share key documents and in-transit information across the network with suppliers and carriers to digitize the data and improve compliance and cycle time through customs.
Track & Trace IoT: A key technology to monitor shipments and possible incidents /in-transit delays. IBM is using Track & Trace IoT Smart Sensors and the Mechanical Tilt indicator attached to outbound and inbound shipments to provide real-time data on location, temperature, humidity, and shock alert.
The Human Factor
IBM also enables its operators to learn cross-functionally so they can move from one area to another, based on demand. The flexible workforce, combined with its flexible platforms, enabled IBM to deliver on customer demands quickly and successfully during the perfect storm of disruption that was COVID-19. The supply chain team, augmented by data insights, can better understand situations and receive recommendations. The interface’s use of natural language also made it quicker, easier, and more intuitive to collaborate.
Digitizing the assembly line with visual and acoustic insights through augmented reality and AI not only speeds up processes and allows support to be provided remotely, it also allows employees to concentrate on value-add tasks in their workflows, enhancing flexibility, agility, and a culture of innovation.
Yet IBM executives do not believe the company is anywhere near the end of its digital journey. As it continues to it use Watson’s AI capabilities to streamline its cognitive supply chain, increasing amounts of data available from IoT devices across the network will help further enable IBM’s AI capability to grow and scale in the future.
IBM is confident that this approach to digitally centered, continually improving processes, combined with its investment in training in both technical and soft skills, is preparing the company to act with greater speed and agility whenever and wherever the next disruption might occur.
More than 35% of cyber espionage attacks in the United States are targeted at manufacturers, more than any other business sector, according to a recent U.S. national defense industry association study.
To ward off today’s determined hackers, manufacturing companies of all sizes must now urgently analyze and protect both their internal operations, and their entire supply chain ecosystem, to prevent malicious disruption, the theft of intellectual property, data ransom attempts, or competitive denials of service.
As manufacturers accelerate the deployment of digital technologies to modernize and interconnect their facilities and supply chains, they also open up new risks for cyber-attacks, stressed Chandra Brown, CEO of MxD, during a recent virtual plant tour for Manufacturing Leadership Council members.
Smaller companies are especially at risk, Brown added. “Hackers are very aware that there may be more vulnerabilities in smaller companies, and their attack vectors on large companies can start with targeted attacks on the smaller companies within their supply chain.”
And a cyber-attack can be fatal: 60% of small companies go out of business within six months of an attack.
MxD, which was designated as the National Center for Cybersecurity in Manufacturing by the U.S. Department of Defense in 2018, took virtual plant tour participants through two cybersecurity demonstration areas within its 22,000-square-foot Innovation Center in Chicago to highlight what can be done.
Build a Cyber Wall
MxD’s framework for cyber security is designed to address the five major cyber security elements published by the National Institute of Standards and Technology (NIST): identify, protect, detect, respond, and recover.
First up on the tour was MxD’s Cyber Wall, which is configured to help manufacturers understand the vulnerabilities of, and required protection for, Operational Technology (OT) systems, which are vulnerable because they typically are based on microcontrollers or PCs that are increasingly connected to local area or wide area networks. As MxD demonstrated the Cyber Wall, they provided the following tips for meeting the first two NIST elements:
Identify: If you don’t know how many devices you have connected to your network, find out. There may be more than you think — the average could top 4,000 in a 100,000-square-foot factory. It’s also key to know what operating system you’re running, how often it’s updated, and if it has the most recent security patches.
Protect: The next brick in the cyber wall is installing software on each device that will keep you updated on whether it’s connected and, if so, if it’s running the latest, most secure software version.
To illustrate how the Cyber Wall works, MxD uses two identical PLC industrial control systems, each attached to a unique network of PCs, routers, switches, and firewalls. One is protected with “whitelisting,” or application control, while the other is not. Rather than trying to keep a list updated with malicious software that is constantly propagating, application control only allows software that is expressly approved. When a USB drive loaded with an unknown malicious executable file is loaded into each system, the protected system blocks the executable file since it is an unrecognized application, while the unprotected system allows it to start malicious activity.
All it takes is one person to plug in a suspect USB or click on a phishing email to set a hacker loose in the system. That’s where network segmentation comes in. The MxD protected system is contained within its own segmented network, with access controlled by a firewall that manages both internal and outside access, so if a hacker does break in, you can keep any damage from spreading to other areas within the facility.
Erect a Cyber Platform
To address the remaining three NIST cybersecurity framework segments — detect, respond, and recover — MxD demonstrated its Cyber Platform. Like the Cyber Wall, the demonstration was based on programmable logic controllers used to power the OT control system, in this case to operate an array of pumps and values to direct liquid through separate clean and wastewater pipe networks. It includes 20 sensors to monitor temperature, flow rates, pressures, and other factors.
Detect: Like most factories, the MxD cyber platform uses an intrusion detection system (IDS) to monitor network traffic and note an anomaly, such as when a hacker tries to take over the PLC. It then alerts appropriate personnel to investigate.
Respond: The most important thing is to have a plan, including official, easy-to-locate policies and procedures. These generally include 1) bringing the system to a safe halt; 2) disconnecting the affected system from the network to keep the corruption from spreading; 3) communicating the incident to the proper internal and, if appropriate, external personnel and law enforcement; 4) performing a root cause analysis to determine how the problem happened and how to mitigate similar incidents in the future.
Recover: While the details will vary across industries, a recovery plan generally should include 1) having a documented plan on how to bring the systems back online — manufacturers should have software backups of all systems, including OT, so they can revert to the last backup that happened before the hack; 2) review the root cause analysis to determine what corrective actions are needed; 3) bring the system back online. MxD engineers did a failure modes and effects analysis (FMEA) when designing the Cyber Platform to determine potential hacker targets and worst-case scenarios ahead of time so they could build recovery mechanisms into their systems. Even if you have an older legacy system, it’s worth doing an FMEA to help drive effective recovery plans, they said.
The goal of manufacturing security is “to operate securely, not to secure operations,” stressed the MxD panel at the end of the virtual tour. The goal always has to be to ensure continuous production, not to be 100% secure.
As cyber threats evolve, manufacturers must also evolve the tactics they use to thwart those threats. But don’t expect to ever be able to thwart them completely. The most important thing, concluded MxD, is to have a plan in place to get back up and running before too much damage is done.
Teaching Analog Systems Digital Tricks
Manufacturing Leadership Council members recently took a virtual tour around MxD’s Innovation Center in Chicago to learn how to integrate digital manufacturing technologies using existing legacy equipment in ways that can help increase agility without breaking the bank or getting buried in a data landslide.
MxD’s nearly 100,000-square-foot Innovation Center in Chicago is a neutral space for manufacturing experimentation and demonstration housing millions of dollars in consigned and purchased equipment that its 300 partners, including companies such as Siemens and Autodesk, use to conduct research and implement projects ranging from augmented reality to advanced simulation techniques. To date, it has invested about $100 million in 60 projects on behalf of manufacturers of all sizes and stages in their digital journeys.
MxD (Manufacturing x Digital), is a six-year-old nonprofit that works in partnership with the U.S. Department of Defense and is one of a network of 16 advanced manufacturing institutes around the country. Its goal is to improve U.S. competitiveness in the manufacturing sector through innovative R&D projects, workshops, and testbeds in the areas of predictive analytics and maintenance, agile and resilient supply chains, cybersecurity, digital fingerprinting, augmented reality, and digital twins.
It’s where manufacturers go to forge their future.
The MLC’s virtual tour included six stops. Because MxD usually hosts live tours and meetings at the center, the first stop outlined some of the health and safety measures MxD has implemented, including touchless thermometer checks, automated doors, masks, physical distancing cues, one-way entrances and exits, sneeze guards, hand sanitizer stations, updated air circulation, and UV-sanitized safety glasses. All measures are in compliance with the CDC and Illinois Department of Health guidance. All visitors and other stakeholders are told about the policies ahead of time.
The other five stops showcased examples of how MxD brings hard-to-visualize applications to reality in a factory setting. It has several testbeds throughout its 22,000-square-foot factory floor that are used for proof-of-concept testing of new technologies, integration and testing of existing technologies, and for educating and demonstrating various digital manufacturing concepts.
In one example, tour participants virtually walked through the process MxD uses to produce small souvenir tokens it gives to facility visitors, using its discrete manufacturing testbed, which uses typical factory equipment, to show how it integrates data collection systems and closed-loop analytics to continually improve its processes.
MxD commonly showcases products from several service providers as well as open-source products to provide a range of perspectives. Participants were also shown how MxD’s test beds integrate older analog equipment into digital systems, using a simple, inexpensive proximity sensor to sense whether the token is oriented correctly. Designed and built-in house, this unit cost less than $600, including all the mechanics, electronics, and control system.
Instead of using a plug-and-play commercial system, MxD also had one of its summer interns design and build the washing station used to rinse the coolant from the CNC process to help foster a better understanding of the higher tech skills tomorrow’s workers will need.
Another stop on the tour walked participants through a visual digital retrofit project MxD is doing in partnership with the University of Cincinnati and several MxD members. The goal is to convert analog information from older equipment into digital information that can be communicated over IoT networks and used in a variety of digital manufacturing operations. The project demonstrated how manufacturers can accomplish this without having to make large capital investments in new equipment by using vision-recognition hardware and software.
The project uses an inexpensive web cam to non-invasively record and digitize data from a simple analog air-pressure gauge – an approach that can be used for other pieces of legacy equipment — with the results fed to a PC which processes the visual information and displays the output on a monitor, including the real-time digital conversion. The PC then sends the information to the IoT network for alerts, analytics, or other digital use cases. This project was developed in partnership with Opportunity Works, a program to help young adults in the Chicago area by placing them as interns in local businesses to learn skills in manufacturing, IT, and supply chain. In this case, they learned how to use 3D printers to fabricate the fixtures in house and helped install the hardware in the factory for testing.
Another virtual stop on the tour showcased how manufacturers can get the benefit of digital technology while continuing to use legacy equipment, such as a type of manual milling machine that’s been in use since the 1930s. MxD undertook the project with Georgia Tech and several MxD members to inexpensively retrofit this type of machine with digital sensors. This specific use case identifies when machines are in operation by installing an industrial current sensor on the power leads to the spindle motor to monitor the current load and communicate the sensor’s output. A $19 microcontroller, simple enough to be programmed by a high school intern, was also used in the project. The total cost for the sensor, panel controller, and power supply was less than $150.
During the following discussion and Q&A session, facilitators and panelists emphasized a few key learnings from the MxD experience:
- The goal isn’t always about gathering as much data as possible, but more about ensuring you collect relevant data that will address gaps and problem areas in the process.
- Not everyone needs an advanced degree or a lot of training to make innovation happen. If the interns and high school and community college students MxD works with can adapt to the needs of digital manufacturing, it’s a good indication that you can educate and upskill your existing workforce to handle the digital transformation.
- The cloud is the big equalizer, enabling everyone to collaborate remotely regardless of location, as has been seen in practice during the COVID-19 pandemic.
- Don’t try to eat the digital elephant all in one bite. Start small and demonstrate the ROI. Once others see the value of what you’re doing, you will start gaining internal advocates who will champion new digital ideas by building on those early successes.
- Be transparent. Make sure that folks in the company know what you are doing, why you’re doing it, and how it’s going to help them, and the company, move forward.
Footnote: Further details: mxdusa.org
Only July 22, the Manufacturing Leadership Council hosted its first-ever virtual plant tour in conjunction with Protolabs, a manufacturer of custom prototypes and on-demand production parts. More than 300 attendees joined the tour, which “visited” six of Protolabs’ U.S. facilities across three cities.
Protolabs was founded by Larry Lukis in 1999 as a rapid injection molding business in Maple Plain, MN. It was originally called Protomold. Frustrated with not being able to get prototypes quickly, he decided to start his own business that would begin with a customer’s problem and then work backwards to automate and scale the necessary solution. The company later expanded into CNC machining services, and opened facilities in Europe and Japan.
CEO Vicki Holt joined the company in 2014, and the company then acquired Fine Line Manufacturing to add 3D printing to its service portfolio, followed by Rapid Manufacturing for sheet metal fabrication. Today, Protolabs is an end-to-end digital manufacturer of custom components with locations in three states and seven countries.
Protolabs has developed a robust ecommerce platform where customers can upload 3D CAD files 24/7 and typically receive an interactive quote within a few hours. The customer receives a digital twin of the part for their inspection, and they can work with Protolabs’ engineering team if they want input on their designs.
The tour began at the company’s injection molding facility in Rosemount, MN, which processes more than four million parts per month. This segment of the tour was led by Gurvinder Singh, Protolabs’ Global Product Director, Injection Molding. Singh said that the standard lead time for a new mold is 15 days, but with rush options a design can often be delivered within one day. In addition to the Rosemount facility, Protolabs also has another injection molding facility in Plymouth, MN.
Rosemount has 125 presses that typically handle part run volumes from 1-25,000 parts, but sometimes make more than one million parts. Protolabs will store customer molds to allow for follow-on parts and offers additional finishing services like adding textures or inserts or printing logos on parts. Injection molding services were a critical element to Protolabs’ COVID-19 response efforts as they allowed the company to make parts for ventilators, face shields, test kits, and masks.
From there the tour went to the CNC machining facility in Brooklyn Park, MN, led by Holt, who is a member of the MLC’s Board of Governors and a member of the Board of Directors of the National Association of Manufacturers, the MLC’s parent. With 380 machines running in the facility, noise levels became a problem so the company installed acoustic insulation in the ceiling to minimize how long sound bounces, taking the sound down several decibels. Protolabs further enhances safety at this facility with a fall arrest harness system for employees who are working on top of mills. The company has an enhanced machining facility in Nashua, NH, that allows for more complex parts via 3-5 axis machining as well as lathe and wire EDM.
The company tries to ensure that it will have enough capacity to ship orders on time every time. When capacity nears its peak, Protolabs brings more machinery online to handle the additional demand. The CNC facility is automated through machine programming, allowing for highly repeatable processes and high quality. Other machining-related services offered by Protolabs include turning, drilling, finishing, and quality control.
The next stop on the tour was the Protolabs 3D printing facility in Raleigh, NC. Led by Rob Bodor, VP and GM, Americas, it is believed to be the largest 3D printing contracting manufacturing facility in North America. The company has the capability for 3D printing with both plastics and metals and can work with a broad range of materials and part sizes. There are 70 stereolithography machines in a range of sizes that can build features as fine as a human hair. Protolabs deploys stereolithography (SLA), selective laser sintering (SLS), direct metal laser sintering (DMLS) PolyJet, Multi Jet Fusion (MJF), Carbon DLS, , technologies to make a variety of parts rapidly.
The final stop was at Protolabs’ sheet metal fabrication location in Nashua, NH, again led by Holt. The plant is broken into two sections, one focused on complex assemblies and the other on speed and scalability. The operation for complex assemblies includes laser cutters, punch presses, press brakes and other hardware, and material selections include aluminum, stainless steel, cold rolled stock, galvanized steel, and brass and copper. Every order is cut from 40×40 blank sheet to reduce waste.
Moving to the second area of the sheet metal plant designed for simpler parts, this plant is built around express work cells, each with their own laser cutter, press brake, punch and hardware station, set up in a cellular layout with an operator who is trained across all of the equipment in the cell. Each day the operators meet in a daily huddle to cover performance metrics, and they contribute to idea boards aimed at continuously improving how the cell works.
During the attendee Q&A following the tour, Holt described their end-to-end digital thread and how they manage all business processes in the same system, so that every piece can connect and talk with every other piece. This digital connectivity allowed Protolabs to respond rapidly in service to its customers at the beginning of the pandemic crisis, especially medical customers.
Holt also discussed the company’s quest to build further resilience and agility into its supply chain in order to always be crisis-ready. While the company is a global business, it operates off of regional supply chains. Holt also praised the responsiveness and resilience that digital technology can introduce to the supply chain during times of crisis.
A complete recording of the plant tour is available here. Watch for notifications from the MLC regarding future digital plant tours.
“Watch the pennies and the dollars will take care of themselves.”
While that old saying might be a maxim for household budgeting, it also could describe Intertape Polymer Group Inc.’s (IPG) approach to developing an award-winning energy management program. Its essence: turn an accumulation of low-value opportunities into a gold mine of high-value savings.
The Manufacturing Leadership Council hosted a tour in February at IPG’s Danville, Va., facility, the company’s flagship plant out of 22 in North America. IPG also operates four plants in Asia and one in Europe and houses its corporate headquarters in Montreal, QC and Executive headquarters in Sarasota, FL. Their products include a variety of paper and film-based pressure sensitive and water-activated tapes, polyethylene and specialized polyolefin films, protective packaging, engineered coated products, and packaging machinery. IPG, with $1.2 billion in revenue in 2019, is the second-largest tape manufacturer in North America.
The company considers the Danville manufacturing facility to be “two plants under one roof” with one part of the facility focused on carton sealing tape manufacturing and the other part focused on stretch film manufacturing. Each has its own compressor room and monitors its energy usage separately. There are more than 300 employees at the 600,000-square foot manufacturing facility and adjoining distribution center.
IPG’s achievements in energy savings have earned the company many accolades, such as being recognized as an Energy Star partner since 2009 and being named a Sustained Excellence Partner of the Year every year since 2016. The IPG Danville facility was named a NASCAR Green E3 Challenge Award winner in 2016 and won Industry Week’s Best Plants award that same year. The IPG Danville facility has realized $5 million in energy benefits through a variety of continuous improvement activities including favorable contractual services.
For these achievements the company has utilized both internal initiatives and outside expertise. Externally, the company worked with Leidos for a turnkey energy management system (EMS) that offers visibility into energy usage at a machine and line level with the ability to track trends over time. The findings discovered from that system led to adoption of new practices for staggered equipment startup procedures to minimize energy demand, as well as improvements in equipment scheduling. Real-time energy usage data is displayed on an LED board within the plant (one for the tape operations side and one for the stretch film operations side). The EMS led to approximately $339,000 in savings in its first year after installation.
Internally, IPG has found great success through its employee-led energy treasure hunts. This is a two-to-three-day Kaizen event where 15-20 participants from different divisions of the company go into the facility equipped with an air leak gun, a FLIR (thermographic) gun to detect temperatures, and a thermometer on the hunt for low-cost and no-cost energy savings opportunities. Each team is given a directional focus, such as facility utilities, chillers/boilers/HVAC, or machine and process operations. Their findings are reported to management, and there is recognition for the team afterward and follow-up for how their findings were addressed.
While it might seem that all problems would be solved after holding just a few of these treasure hunts, IPG says that they did their first treasure hunt in 2013 and still identified $100,000 in potential savings opportunities for future years from treasure hunts conducted in 2019, brought on by continuous changes in people, equipment, and plant configuration.
The company has also realized notable savings through its efforts in curtailing air leaks and improving air flow from its compressors. While IPG added new compressors to its facilities, it initially did so without updating the piping or other infrastructure that supported airflow. An airflow survey found turbulence created by piping bends and kinks, inefficiencies in the compressor system, and many air leaks. Improvements included installation of a demand expander, and eventually isolating two separate compressor rooms to minimize disruptions in the event of an outage. As a result, the plant can now run its compressed air system at lower horsepower with increases in the amount of air in the system. Similar to its energy treasure hunts, the company also deploys a three-person air strike team to regularly detect and correct air leaks throughout its facilities.
Up next, IPG has its eye on further improvements in sustainability, including reductions in its carbon footprint and landfill waste. It is also in the nascent stages of creating safety treasure hunts that mimic its energy savings program.
For companies looking to create their own energy management programs, IPG suggests using the many free tools available online through Energy Star; comprehensive information is available regarding how to organize and execute energy treasure hunts. They also suggest staying informed on the state average price of electricity to ensure utility rates are at or below average, data that is published online by the U.S. Energy Information Administration. If rates don’t fall within that range, the company suggests contacting the local utility provider to determine if lower rate class options are available.
In 1979, McDonald’s launched the Happy Meal, ESPN hit the airwaves for the first time, and Sugarhill Gang’s “Rapper’s Delight” became the first Top 40 rap single. It was also a year when Amway undertook a massive hiring effort for its Ada, MI, manufacturing facility. Forty years later, that wave of new employees is moving on toward retirement – and taking its skills and knowledge with it.
Seeing the approaching predicament that the company was going to face with its labor force, leadership knew it needed a comprehensive, sweeping plan to reskill its workforce and modernize its culture in order to attract and retain new talent and move to a high-performance team model. That was the genesis of its ONE Team initiative, an employee-led program aimed at building employee engagement and retention while also giving the company a flexible, responsive workforce. It’s turning into a success story for its manufacturing operations, one that Manufacturing Leadership Council members were eager to hear about during an MLC plant tour of the Amway headquarters facility in early October.
Founded in 1959 by Rich DeVos and Jay Van Andel, Amway today is an $8.8 billion company with 16,000 employees that produces over 400 products in six manufacturing facilities around the world, including in Ada, California, Washington, China, India, and Vietnam. Some of its key brands, which are sold through a direct selling model in 100 countries, are Nutrilite vitamin, mineral, and dietary supplements; Artistry skincare and color cosmetics; and eSpring water treatment systems and XS energy drinks. Amway has a robust manufacturing operation in Ada, with facilities for personal care products, cosmetics, nutrition products, and more.
To its address its workforce issues, Amway launched the ONE Team strategy about two years ago. At its heart, ONE Team is a change management initiative. Key aspects of the process for developing and deploying the program include involving teams and employees into all aspects of design work and implementation; transparent and frequent communication to all employees throughout the entire process; and partnerships and alignment with critical resources such as HR and executive leadership, with consistent messaging and support at all levels.
’A Tale of Two Cities’
In its current state, Amway is operating plants with two different work systems – a traditional role-based work system, where the work is title focused and defined to a specific role, and a skill development work system, where work is skill focused and generic roles are identified by skill level. The transition moves operations from 18 role-based titles, such as Custodian, Hilo Driver, Production Clerk, and Line Operator, to five future-state skills-based titles – Technicians I-IV, plus a Front Line Leader role.
ONE Team is the solution to numerous challenges that Amway has encountered with its workforce – improving employee skills for multiple tasks, increasing flexibility to allow the workforce to “flow to the work” vs. facing production holdups due to staffing shortages, improving plant efficiency through labor cost and overtime reductions, and giving employees a clear path to career progression with an eye toward engagement and retention.
The ONE Team skills and progression framework is set up on a three-team matrix: Mix, Package, and Warehouse teams, each with its own skill development system. Career progression takes place when an employee demonstrates both the technical and behavioral skills necessary for promotion. Once promoted, team members are expected to maintain those skills and conduct the job tasks at the current level as well as the levels below their position. Team members are put into a job rotation to keep skills sharp, and they do not “graduate out” from performing any particular skill.
Currently, there are 140 employees of the 1100+ total North American manufacturing employees in the new skill-based system, with rollout planned for additional facilities. Two operations have fully transitioned to ONE Team and two others are in the process to complete their transition by the end of the year. Two additional operations are slated to complete program design work and make their transition by the second quarter of 2020.
The Benefits of ONE Team
The teams that are currently operating under the new model are seeing high labor utilization rates, favorable financial performance measures vs. their targets, and higher levels of employee attraction and retention.
In addition to broader deployment of ONE Team, the company is also building a strategy for automation deployment that will move them towards hands-free materials movement and significantly reduce usage of low-skilled temporary labor. The Ada facility is currently deploying 31 cobots mostly for packaging and palletizing and is exploring self-driving vehicles and mobile conveyance tracking.
Asked what they’ve learned, Amway’s leadership says they have found it’s incredibly important to have employees included at every step of the journey, and to create a strong linkage to company values. They also say that top-down support is critical to success and that a dedicated core team is necessary to keep the transition going. Moreover, successful execution requires “doing it right” vs. being “driven by schedule.”
Amway says they will continue to seek opportunities for sensible automation deployment and will keep going full steam ahead with its transition to high-performance teams.
Oracle Corp. is widely recognized as one of the largest software companies in the world. Founded in 1977, Oracle has developed and sold database management programs, applications, and other software products for decades, amassing more than 147,000 customers in 175 countries. In its 2019 fiscal year, Oracle posted $39.5 billion in revenue.
But less well known is that Oracle also manufactures computer hardware. The company got into the hardware business in 2010 when it acquired Sun Microsystems, which at that time was considered one of the leading makers of engineering workstations and servers.
With revenues today of about $2 billion, Oracle’s Sun server business represents only a fraction of the company overall. Still, its production volume of about 6,000 server units per year feeds both the commercial market as well as Oracle itself as the company continues to grow its data center footprint worldwide.
Most notably, Oracle quotes a five-day lead line on server orders. How it is able to do so was the subject of a Manufacturing Leadership Council plant tour earlier this month at Oracle’s 80,000-square foot manufacturing facility in Hillsboro, Ore.
MLC members learned about Oracle’s production model, its supply chain management operation, its emphasis on quality, and saw the company’s first steps into employing Internet of Things technology on the factory floor.
The Hillsboro factory, which assembles and tests more than 70 different types of server products including Oracle’s Exadata database server, traces its roots to the early 1970s under a company called Floating Point Systems, a manufacturer of attached array processors and so-called mini-supercomputers. FPS was sold to Cray Research, a maker of supercomputers, in 1991. In 1996, Silicon Graphics acquired Cray, and shortly thereafter Cray’s Business Systems Division was sold to Sun. In addition to server assembly, the Hillsboro facility also plans for other products such as Oracle’s Micro POS equipment.
Over time, the factory’s fixed lead times have evolved. In 2005, for example, lead times stretched from 10 to 50 days. By 2010, the factory was able to offer eight- to 12-day lead times. And in 2015, a decision was made to fix lead times at five days.
“The five-day lead time was a choice,” said an Oracle executive during the tour. “The prior model had a lot of variability. But we wanted to increase customer satisfaction. And It is much easier to communicate a fixed lead time to a worldwide sales force.”
The Hillsboro factory employs a build-to-order assembly model that encompasses six external manufacturing partners. The internal process consists of mechanical assembly, cable assembly, testing, packing, and shipping. Data center standard 78x24x40-inch servers, each with up to 32 racks, are assembled in the factory. Oracle software is loaded into the systems and engineered to work with the hardware.
Customers order servers using Oracle’s Configure Price Quote Configurator system, which enables assembly instructions and testing specifications. The factory’s supply chain management process embraces a classic design, source, plan, make and deliver model. The supply chain is managed using Oracle’s supply chain cloud-based applications.
The entire manufacturing and assembly process, including supply chain partners, spans 20 to 24 weeks, Oracle officials said.
In one area of the production process, Oracle recently implemented an IoT application it calls “digital bins”, plastic box-like structures that are filed with components used in assembly whose weight is monitored by sensors that convert weight to piece counts. The technology is from a company called, appropriately enough, DigitalBins.com of Long Valley, N.J.
When components are used and the bin’s weight is reduced, the bins send out a replenishment signal. Managers receive an e-mail alert when a signal is sent. Factory officials said the digital bins are more accurate than physical counts of a bin’s components.
Oracle officials said the digital bin implementation is just the first step they are taking with IoT. “This is something that we really want to leverage to a full extent,” said one Oracle executive of the IoT. “We are looking to connect with our other manufacturing partners and get a better understanding of systems and data around our ecosystem.”
Asked about any “unintended consequences” that occurred as it was establishing its five-day lead discipline, Oracle officials said a measurement called the “atrocity metric” was set up to monitor mistakes that happened more than once.
“There were a lot of surprises that you didn’t think would pop up,” said one Oracle official. “Often times it would be an area of the supply chain that didn’t deliver and created a lot of problems on execution. If you have to reschedule an order twice, that’s an atrocity.”
The atrocity measurement worked, Oracle officials said, because it challenged the “will power” of staff members and enabled them to understand that they can overcome any challenge or obstacle.
A highlight of the tour was Oracle’s discussion of its sustainability efforts. The Hillsboro plant recycles 95% of its waste. In June, Oracle won the Manufacturing Leadership Council’s High Achiever Award in its Sustainability Leadership awards category for its Take-Back Sustainability Program.
Looking forward over the next few years, Oracle officials said they would like to see a number of supply chain advances take place, including tighter data integration in the chain.
Now attuned to the fast-and-getting-faster world of e-commerce, consumers have come to expect a much shorter time window between when they click “buy” and when that item will show up at their door. That’s true of the average person who’s buying laundry detergent on Amazon, but also of industrial and commercial customers who are ordering specialized parts and components from vendors and suppliers around the world.
Future Electronics is perfecting this practice from its crown jewel distribution center near Memphis, TN, a site visited by a group from the Manufacturing Leadership Council on May 1. With a goal of delighting their customers again and again, Future Electronics faithfully follows a hyper customer-centric and supplier-centric business model. With customers ranging from hobbyists to OEMs, and those customers ordering from around the world, Future Electronics services them seamlessly, while also giving them flexibility for their preferred carrier, shipment speed, and shipment type (for example, parcel vs. pallet).
That vision has paid off for Future Electronics, which has grown to be the third largest electronic components distributors worldwide. Founded 51 years ago in Montreal, Canada by Robert Miller, the company now has 169 locations worldwide. The Memphis distribution center, which consolidated facilities in Bolton, MA, and Montreal, Canada, was built in 2004. The company choose Memphis to tap into its rich transportation network – its airport is the world’s second-busiest cargo airport, only behind Hong Kong. The Memphis area is served by five Class I freight railroads; its location close to several major interstate highways puts it within an overnight drive of more than 150 metro areas nationwide.
What customers and suppliers see on the front end is enabled by what’s behind the scenes: the awe-inspiring technology integrated into the Future Electronics distribution center. Held up as a world-class model of advanced distribution, visitors come from around the world to see it for themselves. The Memphis DC holds copious amounts of inventory and every SKU is stored in a secure, strict temperature- and humidity-controlled environment. Upon receiving components from suppliers, they are sorted into totes to keep like parts with like parts, one product type per tote or pallet, with the same date code range and same country of origin. Kept in 50’ x 600’ racks and retrieved by a fully automated crane system, product storage location is optimized for peak retrieval efficiency based on demand.
Product totes are then automatically transported to pickers to be sorted into customer totes and prepared for shipping. Orders go out on the same day they were received up to 8:30 pm for domestic ground air and next day via air at midnight ET. A seemingly small thing, but perhaps with larger cultural implications: product value is not displayed anywhere on inventory, nor is any customer information visible to employees in the warehouse. In that way, employees aren’t tempted to be biased on how they handle components that have low value vs. high value, or shipments for high-volume customers vs. smaller ones. In total, the facility has the capability to ship more than 120,000 different part numbers overnight.
It should also be noted that in the entire facility, the company has only three forklifts – two in use at any given time, with one spare. The company carries an impressive array of certifications: ISO 9001 (Quality Management System); AS 9120 (Aerospace Certification); ANSI/ESD 20.20 (Electrostatic Controls); ISO 14001 (Environmental Management Systems); and CTPAT (Customs Trade Partner Against Terrorism).
Additionally, Future Electronics offers consulting services to its customers to share best practices for supply chain and Lean practices. The Memphis DC has been so successful that the company replicated a near-exact copy for its European operations in Leipzig, Germany.
Company leadership says that being privately owned has allowed them to do things that would be difficult if their primary business focus was creating shareholder value, vs. creating value for customers and suppliers. Because their growth has been organic rather than through acquisition, they are able to operate with consistency throughout all their locations, including in their IT platforms for operations, warehousing, transportation, and exporting.
Even though the company is a world-leading model of advanced distribution automation, company leaders still see room for improvement. They spare no effort hunting for technology that will help them operate more efficiently, with a current focus on improving KPI visibility for all employees. Like their manufacturing counterparts, they struggle with finding and retaining workers and are working with tech schools and community colleges to develop materials handling curriculum.
With a forward-thinking mindset, a constant eye toward improvement and a solid strategy for growth, it seems there are many more exciting developments to come from Future Electronics.
At the ABB Dodge plant in Marion, NC, the keys to success are integrated business teams that function on a foundation of collaboration and trust, as well as operations that concentrate on standardized processes and a top-grade safety culture.
These were some of the key takeaways from the Manufacturing Leadership Council’s plant tour of the ABB Marion facility earlier this month. More than 50 MLC members toured the Dodge plant, engaged in a question-and-answer session with plant management, and discussed their own initiatives around the tour’s theme of cross-functionally integrated business teams. Tracing its roots from 1883 when Ludvig Fredholm started making electrical lighting and generators, ABB, in its present incarnation, was formed in 1988 through the merger of ASEA and BBC. Today, ABB is a $34 billion global corporation made up of four main divisions: electrification products, robotics and motion, industrial automation, and power grids. With headquarters in Zürich, Switzerland, the company operates in 65 countries and has nearly 135,000 employees worldwide.
The Marion, NC, plant has core competencies in tapered roller bearings and spherical roller bearings, which have primary applications in aggregate belt conveyors for mining operations, grain elevators, and air handling systems for power generation. The 256,000-square-foot plant opened in 1996, and today has 170 employees working over three shifts.
Three words heard often at ABB are safety, flexibility, and accountability. Hourly employees are cross-trained on a variety of shop floor functions and equipment to allow for flexibility in job assignments. Performance monitoring and continuous communication between all levels of the organization builds a companywide accountability mindset. Daily safety conversations at the start of each shift bring attention to best practices and potential areas of improvement. There is a continuous effort to keep safety top of mind, and the safety culture at the Marion plant is so good that they have had just one lost-time incident in the plant’s 22-year history.
While these integrated teams have improved how the plant works on the inside, it has also been crucial to the company’s mission of improving customer value and streamlines into the company’s voice of the customer process. This process identifies a complete set of customer needs at the start of the product development cycle, with the following goals:
- To define engineering requirements for new product development
- To increase the success rate of new products by focusing them on solving customer problems
- To reduce or eliminate costly design changes to new products once they are delivered to market
Using this process, the company heard from its mounted bearings customers that they wanted to minimize unplanned downtime, more easily monitor the health of their bearings and know when they were due for replacement, monitor bearings remotely, and eliminate the safety risk from internal bearing inspection done by their workers.
From that information, the company introduced the ABB Ability smart sensor for mounted bearings. The wireless sensor monitors temperature and vibration within the bearing, sending a warning if it detects anomalies. A bearing is then more easily repaired or replaced before a breakdown, and physical bearing inspection is no longer necessary. As MLC members witnessed during the tour, the sensor is tapped into the bearing’s housing and can be installed or removed easily through a pipe plug. It includes a QR code that routes directly to the smart sensor website, a resource for bearing data, user information, and customer support.
At the time of this plant tour, ABB was just entering the second month of a tiered accountability improvement system, formally known as the Relex daily management system. The goal of the program is twofold: (1) to drive employee engagement, and (2) to quickly understand a team’s wins and losses when it comes to meeting performance metrics. Utilizing four tiers, the system is designed to identify problems quickly, to empower staff to resolve the issues they can, and to rapidly escalate any remaining issues for swift resolution. Even in its earliest stages, the company has reported that productivity and safety KPIs have improved since program implementation.
As one company official said during the panel discussion: “Our cultural glue is giving people the power to make decisions, but also being accountable for their outcomes.”
When company officials were asked about what they felt was the next level for the Marion plant, they had broad ideas for the future. One said more sensors and more centralized data collection. One mentioned automated conveyance – to end the use of fork trucks on the plant floor. One suggested a universal pay scale for hourly employees to maximize flexibility, and several mentioned building a more nimble supplier base.
With an engaged workforce, culture of accountability, and an eye on products that will be the best solutions for their customers, the ABB Dodge plant is a case study in operational excellence achieved in large part with the help of cross-functionally integrated teams.
A continuous improvement system aligned with a collaborative work culture and linked to a clear set of corporate objectives can create a better future for a manufacturing company, its employees, and for customers.
That was the central message at motorcycle manufacturer Harley-Davidson’s York, PA, plant during a Manufacturing Leadership Council tour last month. About 50 MLC members toured the 607,000-square foot York facility where Harley assembles its Softail, Touring, CVO, and three-wheel Trike families of motorcycles, and learned about Harley’s Continuous Improvement System (CIS).
The structure for that system can be thought of as an inverted triangle enabled by a sustainable lean culture that has three major components – engaged employees, proven processes, and focused leadership, with general management at the bottom of the triangle. And five key principles support the structure: standard work, built-in quality, just-in-time production, continuous improvement, and people involvement.
But the key to CIS is Harley’s manufacturing vision and history. The company’s vision, visually evident on posters in the York plant and embraced by team members, is that “pride drives competitive advantage, and that work strengthens the brand and builds our future.” Harley team members “communicate openly in real time and proactively solve problems together. Together, we create the future.” To demonstrate the commitment to this vision, six Harley team members recited the company’s vision statement by heart at the start of a panel discussion with York plant management after the tour.
That they were able to do so reflects the unique persona enjoyed by Harley- Davidson, whose motorcycles and rugged image command an almost cult-like following that was created over the last century to enable “people to realize their dreams of personal freedom”. Founded in a small shed in Milwaukee in 1903 by William S. Harley and brothers Arthur and Walter Davidson, today Harley is a $5.65 billion company, with net income of more than $521 million in 2017. In 2018, it expects to ship more than 230,000 motorcycles.
But shifting market and buyer dynamics led Harley in 2016 to launch a 10-year strategy to grow its business. The strategy has five key objectives:
- Identify two million new riders in the U.S.
- Grow international business to 50% of annual volume (it is about 40% now)
- Launch 100 new high-impact motorcycles
- Deliver superior return on invested capital
- Grow the business without growing its environmental impact
The York plant is gearing up to execute on these objectives and has nine new motorcycle models planned for launch. Under construction now is a 56,000-square foot extension of the plant that will house two new assembly lines. A new electric bike that Harley has had under development will be built there. Construction of the extension is expected to be completed by the end of this year. Some of these workers will come from Harley’s Kansas City factory, which is ramping down.
The York plant makes fenders, fuel tanks, and frames in addition to its assembly operations. During the tour, MLC members got to see the fuel tank and frame operations, the painting process, vehicle quality audit, and roll test, an area with five bays where diagnostic tests are conducted on bikes.
A bike frame, for example, has 31 parts that are welded together in four minutes using 264 linear inches of weld. The plant produces 470 frames per shift. It takes seven hours for a single coat of paint to be applied, dried, and cured, and 12 hours for a two-coat application.
Under Harley’s continuous improvement process, downtime is tracked every two hours, workers rotate every 90 minutes, and plant floor team members hold each week what they call Board of Directors meetings to work through any problems that may have occurred in the operation. A Continuous Improvement Board mounted in an area of the plant floor displays health and safety, quality, delivery, cost, people, and sustainability statistics. “If leaders don’t show interest, it won’t get done,” one Harley official said of the Board of Directors. “They need to know it is important.”
CIS itself was implemented in 2009 and was initially focused on compliance, but has evolved to now also focus on plant performance. York goes through a CIS assessment twice a year. The assessment process has four phases: foundation and organizational alignment, expansion and discipline, integration and reinforcement, and sustaining momentum.
In addition to this process, Harley has put in place a cross-functional team consisting of people from its information technology (IT) and operational technology (OT) departments to support assembly line and engineering processes. The IT team trains on PLC systems and the OT team trains on IT. “Their number one priority is to solve problems within takt time to make sure the assembly line is running,” an official said.
During the question-and-answer session with York plant management, officials were asked what their aspirations for CIS are in the next five years.
Proactive problem-solving, as opposed to reactive; better information at the operator level to make decisions; and 100% commitment to CIS by every team member were the top goals cited by Harley managers. M