Manufacturing Focus—A Comprehensive View

Examples of Manufacturing Focus

The following are examples of manufacturing focus. Names and some facts have been modified to preserve client confidentiality.

Northstar Aluminum Products

Northstar is an aluminium foundry. The company makes about 4400 distinct castings for many customers in several industries. Their castings are used in products ranging from lighting fixtures to decorative bowls and portable pumps. They specialize in medium-precision sand castings using green-sand and jolt-squeeze moulding equipment. Hand ramming produces moulds for prototype or very low-volume work. Northstar offers five alloys to its customers; several alloys may be stress relieved.

Other processes such as die casting, investment, automatic moulding and lost-foam are feasible. These other processes are more labour efficient. However, they also require a high capital investment and have long setup times that are more suited to higher volume than the jolt-squeeze process.

Northstar might also offer other metals. Irons and steels require much higher melting temperatures, and have different moulding requirements. Brasses and bronzes have similar pour temperature and mould requirements, but their lead content requires sophisticated ventilation systems.

Casting metal in sand is an ancient art and is simple in principle. Execution, however, requires skill, experience and close control of many variables. Technically, it is more difficult than many so-called 'Hi-Tech' processes. These technical demands are so severe that few foundries can master more than two or three processes.

Northstar has chosen to focus its plant on a single casting process and a small range of similar alloys. As a result, they have earned a reputation as the lowest cost and highest quality medium production aluminum foundry in the upper Midwest. Process focus has enhanced their expertise in a technically demanding business.

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Commercial Fixtures

Commercial Fixtures Corp. manufactures a variety of lighting products which incorporate numerous precision, low-volume castings. These fixtures also require sheet metal parts, electrical components, glass lenses and plastic shrouds. All products are painted to a high-quality gloss finish. The Commercial Fixtures catalogue shows six major fixture groups. Each group has 6-10 styles and 4-8 sizes. Each style is available with high-intensity discharge (HID) or incandescent light, and four voltages.

Until recently, Commercial Fixtures operated an aluminum foundry to supply its casting requirements. Their foundry, however, was too small to purchase supplies effectively. Neither could it support the pattern makers and process engineers required for cost-effective operation. High cost, quality and productivity problems caused Commercial Fixtures to close its casting operation. The firm then contracted with Northstar Aluminum for its cast components.

As a result of this action, Commercial Fixtures reduced the range of their processes. The firm thus achieved a higher degree of process focus at the site level. They concentrated their efforts on assembly, paint and sheet metal forming. Cooperation between the two companies resulted in more cost-effective, focused operations for both of them.

Below the site level, Commercial Fixtures implemented GT workcells in the sheet metal area and dedicated cells for final assembly. The company thus moved towards a higher degree of product focus at the department level.

This combined focus approach has been highly effective. It requires Commercial Fixtures to master only three types of processes, yet it achieves most of the quality, throughput and productivity advantages of a pure product focus.

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Inter-Defense Industries (IDI)

IDI manufactures armoured vehicles. During the Cold War IDI supplied many Western armies from its factories in Western Europe. Through the 1960s, high-variety, low-volume and the unpredictable fortunes of politics and war had led the firm towards a process focus. In the mid 1970s, the Mark VIII Heavy Tank was a major success with long-term contracts and stable delivery schedules.

In the first two years of production, IDI encountered difficulties. Despite the high volume and predictable schedules which they had always desired, manufacturing could not cope. High inventories, poor quality, delays and coordination problems threatened an 82-year reputation.

The crises in manufacturing forced an organic restructuring. IDI rationalized manufacturing and rearranged accordingly. The Mark VIII had higher volume and production stability than IDI's other vehicles. It was also more complex and had a higher level of technology. This led to a segregation of the new Mark VIII in its own facility, a focused factory, with a single product.

Within this overall product focus, some components had dedicated processes such as welding, machining and assembly. They were physically arranged in proximity to the assembly areas. Like a river, the final assembly line was fed by branches where major components were assembled. These branches were, in turn, fed by the confluence of smaller production streams.

One major tributary of the final assembly stream was the turret. The turret had guns, missile launcher, fire control, command systems and armour. It is the most complex single sub-assembly with the exception of the hull itself.

Turret production was segregated in a plant-within-plant (PWP). All equipment and operations necessary to make the turret, its subassemblies and many components were in this product-focused PWP.

The turret factory was organizationally independent as well. It had its own maintenance, production control and industrial engineering support.

Before the restructuring, production at the workstation level fluctuated wildly. After the changes, day-to-day schedules stabilized as each operation produced only enough for immediate downstream requirements. Inventories shrank and quality problems surfaced quickly. Significant improvements in quality, productivity and delivery resulted.

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Kansas Steel Foundry

Kansas Steel grew from a small grey iron foundry which served the repair and replacement needs of the transcontinental railroads. In the early 1980s, Kansas Steel was one of a handful of foundries that could make very large castings. The foundry poured about seven basic alloys from two electric arc furnaces and two coreless induction furnaces.

Several years ago, Kansas steel examined its mix of customers and products. While all of its castings were similar in size, alloy and mouldability, market segments differed in other significant ways. Market segments included:

The largest of these segments was military armour. These castings became part of various armoured vehicles. They included armour pieces as well as mechanical and structural parts. The armour segment represented about 40% of total production but only 20% of profits. This was somewhat disconcerting to Kansas Steel's management. Competition in armour was not aggressive and, pound for pound, armour castings sold for significantly more than the industrial castings.

The plant had great difficulty with the military quality standards as well as the documentation and testing requirements. Rework, repairs and delays were excessive. Management was also concerned about the excessive management support required since it increased overhead for all products.

Kansas Steel decided to split operations into market-focused factories. Fortunately, the site and buildings suited this arrangement. Each factory had separate facilities with the exception of the melt department. Here, two furnaces were dedicated to the new Armor Division (KSAD). The remaining furnaces served the new General Industry Division (KSGID).

The Armor Division enjoys stable production schedules and long-term contracts. Quality standards are very high. The smallest speck of dirt or defect introduced in the moulding department generates massive welding and grinding in the cleaning room.

Those employees who work on documentation with government inspectors have learned to deal effectively with both. The Armor Division hires experienced foundrymen, pays well and has a stable employment policy.

General Industry Division must cope with erratic delivery schedules and economic cycles. KSGID has many new products. However, the quality standards are less stringent and external paperwork is minimal.

The GI Division pays lower wages than KSAD and frequently changes employment levels as production varies. Only a cadre of senior workers can depend on steady employment. Quality standards are lower and procedures different.

As a result of these differences in apparently similar castings, the Armor and GI Divisions evolved different production control systems, quality assurance organizations and suppliers. They have focused two divisions with similar products and volumes around different markets.

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Grandma's Pies, Inc.

Grandma's Pies manufactures fresh pies for restaurants. Their drivers deliver many varieties of high-quality pies to medium-sized, upscale restaurants who special order 24 hours in advance. Requirements for freshness and personal contact led Grandma's to a geographic focus bringing all customers within 150 miles.