Leadership & Management of Machining

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PYRAMID

I believe that machining is the most challenging type of manufacturing process from a technical and managerial perspective. Contributing to this is a lengthy era of rapid change, constant pressure to innovate in order to reduce cost, and erratic global markets. From a technical perspective, the high number of input variables that must be controlled to produce complex geometries, precision tolerances, and flawless surface finishes exceeds the demands from other manufacturing processes. A die or mold will produce thousands and possibly millions of components with no appreciable wear. Assembly processes, by nature, have no wear and little variation other than the variation driven by the lower-level components. Conversely, during machining the cutting tools begin to wear on the first part, and there may be dozens of cutting tools on any given operation. Developing economies consistently begin with assembly, fabrication, and continuous process industries (chemical, food) because of these facts. Only later do they begin repetitive machining of high-volume components with simple geometry and open tolerances. Low-volume or batch-volume machining of medium to high complexity is still the domain of advanced economies in Western Europe, North America, and Japan. Often overlooked are the infrastructure requirements to produce critical aerospace, medical, and energy-related products. In low-cost regions, the integrity of the raw materials, heat treat, and chemical coatings is a grave concern.

Manufacturing has evolved in Western developed economies. We started with craft production, moved to the replaceable components of Eli Whitney, through the assembly lines of Henry Ford, and finally onto the Toyota Production System, and now, mass customization. Over the last two decades, machining, or more accurately, Computer Numerical Controlled (CNC) machining and its family of support technologies, have further evolved to the level that we need a new approach to management and technology implementation.

The ability to collect and share real-time data, store and retrieve mass amounts of process documentation, and advances in CAD/CAM accompanied by game-changing metrology and machine tool developments have created a data-connected factory far surpassing productivity and quality potential of past years. Gone are the days of problems building undetected and, once detected, waiting for a team to be assigned until the problem could generate a large enough savings to justify resolving. The new model is people, equipment, and data to create robust processes on day one and the breadth of talent and detection to sustain and continuously improve processes 24/7. I call this management system for modern machining organizations the machining pyramid (see Figure 1.1).

The Machining Pyramid that I am going to discuss is a holistic approach to organizational success for a manufacturing company, with specific emphasis on machining. It is an integration of many business and technical practices combined with my 30 years of success in diverse machining facilities. Many organizations fail to achieve expected results despite management changes, consultants, lean implementation, capital investments and other initiatives. Understanding the Machining Pyramid will display the management system and infrastructure that must be in position to optimize and connect upstream and downstream machining activities.

We learned about pyramids as children. We drew pyramids, we saw them on TV and in cartoons, and most of us have made human pyramids at one time. We certainly still see them today formed by cheerleaders at basketball games. More importantly, we know that the ancient Egyptian pyramids remain well preserved and standing strong after several thousand years.

What you have never seen at the basketball game is the top cheerleader placed in position prior to all the base layers. It is highly probable that when drawing a pyramid you will draw the base layer first. It only seems to be in business that we seek to build the pyramid from the top. In manufacturing, especially machining, we need to build from the bottom and not the top. How many times has someone in your organization stated, “we need to improve our on-time shipments”, or “we need to reduce scrap”, or the ultimate construction-from-the-top-of-the-pyramid pronouncement, “we need to increase profit margins”. The simple reason that these wishes (scrap, on-time deliveries, profits) are upside-down construction is that they are not actions that any given employee or group of employees can perform. They are, in reality, percentages.

Each one is a metric with a numerator and a denominator that represents thousands of outcomes and is influenced by dozens of variables. They are, in fact, byproducts of performing other tasks. They are not themselves tasks which can be performed. If you seek improved cost of quality, delivery, or profit, you must perform all the tasks better that aggregate into the numerator or denominator.

For example, profit margin for a given month is an average of the profit for each product shipped during the month. This can be hundreds or thousands of unique components, assemblies, fabrications, etc. The profit on any one item is influenced by the sale price (or for some organizations an internal transfer price) and the total actual cost to produce the item. The sales price can frequently vary and is particularly subject to swings at contract shops and design/build organizations. Total actual cost will vary due to the cost of the material, expediting outside processes, any scrap or rework incurred, and the amount of direct labor at each operation. If your company shipped 100 unique items during the month, and each item required an average of six manufacturing steps (also called operations), then you performed six hundred operations during the month. Each operation was an opportunity to scrap the items or to significantly overrun the expected labor. Each operation also required some level of setup, first piece inspection, tooling changes, and possibly a handoff between shifts. You may have been successful on 575 operations, but the other 25 operations generated enough scrap/rework or additional labor to reduce the profit margin.

Let us look a little deeper at the “tasks” that have to go right to be successful on “each” of the six hundred machining operations performed each month. The machine tool needs to be available and capable of holding the tolerance on the print; the cutting tools, fixtures, and inspection devices need to be located, accurate, and set up correctly; the machinist needs to be properly trained and must not commit errors or spend excess time; the CNC program needs to be accurate and provide enough documentation for the machinist to understand how to set up holders, tooling and fixtures without creating scrap or using excess time; the parts have to be correct from each preceding operation, and in general the overall process created by your engineering or processing group needs to be lean and statistically capable of producing parts within tolerance. All this is challenging when you are machining the same or similar product each month—sometimes referred to as high volume/low mix. For organizations that are producing new components, that have varying quantities and little visibility to customer demand—sometimes called low volume/high mix—managing these tasks is extremely challenging.

As a result, to improve the profit margin you not only need to improve the underlying tasks discussed above, but the tasks must be executed on all shifts, for all operations, on new or old parts, and with experienced or new machinists.

On-time shipments and scrap/rework have completely other sets of tasks which must be executed for each operation, each shift, each day, and each month. These “tasks” are the execution level of building blocks on our Machining Pyramid.

Lean Manufacturing and Six Sigma are an important part of our Machining Pyramid. Your product mix, volume, and overall business model will determine the degree to which you can employ these tools to manage your operations. I believe there exists a separate foundation to your business that, if strong, will allow you to develop and optimize lean tools and Six Sigma tools.

So, our Machining Pyramid begins with a bottom layer that I call the foundation layer (see Figure 1.1). This consists of five strong blocks that, when properly established, will support all organizational activities in good times and in bad times. We are building our pyramid to last for decades. We are building our pyramid to survive earthquakes, storms, and time. Our layers are not just blocks sitting on top of each other. We are building a Machining Pyramid with three-dimensional interlocking blocks. The foundation layer consists of people, equipment, information technology, quality system, and leadership.

There are many ups and downs to owning and operating any business. Manufacturing organizations encounter additional challenges. In addition to the typical economic cycle of boom and bust, the ordinary manufacturing enterprise will periodically lose a key customer, key personnel, or perhaps a key supplier. The manufacturer also periodically must reinvent their products or services, face recalls or serious quality escapes, and other man-made or natural catastrophes. Through it all, a properly instituted foundation layer will provide the strength, wisdom, depth, and breadth essential to negotiate troubles with minimal disruption and stress.

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