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Most manufacturers understand the importance of being flexible enough to embrace changes with their manufacturing models to switch between high volume and high mix production. Equally important is to minimize the cost of change to ensure success. However, in today’s fast-changing global environment, compliance issues are increasingly impacting many businesses, forcing decisionmakers and influencers to address these concerns at many levels of operation. At the same time, they must ensure the highest possible product quality and variety, respond quickly to customer or regulatory requests, and optimizeinventory levels. All these concerns are set amidst the wider backdrop of rising industry competition, shrinking product lifecycles and growing pressure on margins. In addition, many manufacturers have turned to outsourcing, which creates new issues of its own while delivering undeniable benefits. The reality is that manufacturing has become an extremely complex operation, and therefore to succeed at very high levels companies must recognize the need for integrated performance solutions. Many manufacturers tend to focus on specific areas, but isolated process improvement does not deliver maximum benefit. MES ensures effective production management
MES is the key to achieving maximum efficiencies. As defined by the Manufacturing Enterprise Solutions Association International, MES is a dynamic information system that drives effective execution of manufacturing operations. It uses current and accurate data to guide, trigger and report on plant activities as events occur. The MES set of functions manages production operations from point of order release into point of product delivery into finished goods. In short, MES ensures efficient and effective management of production by coordinating and synchronizing applications, people and equipment in real time. It adds value to processes, reduces manufacturing cycle time, improves product quality and lowers WIP. It also shortens lead times, cuts down on paperwork between shifts, and empowers plant operations staff. A study conducted in 2003 by Industry Directions Inc. titled “The MES Performance Advantage: Best of the Best Plants Use MES” demonstrated the significant gains from MES. The study analyzed 106 companies operating in various industries including aerospace, automotive, electronics, high sanitation, metal forging/casting/ stamping, and plastics. All were IndustryWeek Best Plant winners and finalists. Comparing the annual value of shipments minus material and manufacturing costs over a three year period, the research showed that plants using MES improved profitability four times as much than plants that do not (see figure 1). Profitability was judged on plantspecific performance factors: productivity, process improvement and personnel performance. Overall, MES provides considerable performance advantages toplants that use it over plants that do not. Growing adoption of lean manufacturing
In addition to MES tools, increasingly, more companies are recognizing the competitive advantages created by applyinglean principles in their production. Pioneered by Toyota’s production system and perfected within the automotive supply chain, Lean is defined as a systematic approach to identifying and eliminating waste through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection(Rod Bayard, Bestweld Inc.). Lean embraces a broad set of tools, principles and techniques for streamlining business processes. While it is still predominantly a manufacturing phenomenon, companies are starting to drive lean practices across their supply chains, workingwith both customers and suppliers. At its quarterly forum held March 2007 in Mexico, Technology Forecasters Inc. (TFI) presented the results of a survey of 250 electronics manufacturing managers. The study shows significant progress in the application of lean principles across the electronics industry with 34 percent of surveyed companies reporting extensive implementation in many areas, and 6 percent saying Lean has become standardacross their operation (see figure 2). TFI’s research showed a strong positive correlation between the application of lean principles and financial performance. Three-quarters of the companies with advanced lean programs had net profit margins greater than 5 percent of revenue, compared to 28 percent of non-adopters. Non-adopters accounted for the highest percentage of companies with net profitsless than one percent. About one-third of the respondents claimed to have extensive lean implementations. The biggest focus area was on using lean manufacturing to improve efficiency and processes, remove waste, reduce production costs and improve materialflows in the factory. Adapting Lean to the electronics industry
As growing numbers of electronics manufacturers implement lean manufacturing in their factories, there is growing need for a lean planning system (LPS) that is geared toward their specific requirementsand challenges, which include: • Production leveling (Heijunka) with a large number of items (optionbased planning)
• Production leveling with highlyvariable demand (seasonality, for example)
• Kanban systems in low-volume, high-mix environments
• Kanban systems in build-to-order environments These environments tend to be unique to the electronics industry, and therefore lean implementation needs to be somewhat different than it would be in its original automotive context. Managers must increasingly rely on systems designed specifically to support lean efforts in electronics manufacturing. This is where MES tools come in. MES can support the implementation of lean manufacturing. While a manufacturer does not become lean simply by implementing MES, MES systems exist that will support him in this effort. Applying lean principles
Effective application of lean principles requires that the entire manufacturing process be considered, from material supply to delivery of finished goods. Improving a select area without considering the entire process is likely to leadto falsely perceived improvements. For instance, when SMT engineers focus on the SMT line but exclude the final assembly line from their purview, they may feel they have achieved higher productivity in their part of the process. Ultimately, however, they are building more semi-finished inventory—the final output may not have changed as final assembly cannot keep up with production. Furthermore, inventory levels could have tightened, creating the risk of the material no longer being availablefor urgent and unforeseen orders. Lean requires that production be at the pull of the customer, and synchronized and planned with the pacemaker. To understand this better, let’s look at a manufacturing line. The pacemaker dictates the planned production time per product and pulls from the previous process. However, sometimes the previous process may require a changeover, and it will not be able to provide the requested semi-finished product on time, unless it comes from a strategic inventory buffer (the supermarket). To optimize these buffers and minimize the inventory infactories, software solutions are required. Bringing everything together: the holistic approach
More than ever, a holistic approach is critical for maximizing manufacturing performance. Holistic in this sense means having a complete product portfolio and complete solutions workflows across that portfolio. And those solutions should cover the machine level, line level and factory level—in other words, all five levels of the ISA-95 model. The key benefit of this holistic approach is maximum data accuracy, resolution and real time availability in all key aspects of manufacturing:
• Materials management
• Maintenance
• Performance
• Quality management
• Process control
• Resource management and order management
• Work in progress tracking The example on table 1, touching on only one aspect of the solution and focusing on material aspects within PCB assembly, will explain the correlation between all three dimensions. Case study based on an existing solution
Let’s look at a real case (table 2) and see how software solutions can help master one of today’s most common manufacturing challenges – manufacturing in small lot sizes. For this example, we assume that there are enough orders to sustain a continuous flow of production and thepacemaker process is the SMT assembly machine. This case study is becoming increasing common as manufacturing moves towards high-mix production, with smaller lot sizes. In addition, the trend for customized production or build-to-order has grown. For such a customer, the only requirement is to manufacture the amount requested at a specific time. Therefore there is a need for a solution that supports continuous flow of production regardless of the number of changeovers, or even able to manage short-notice changes in the production schedules. The solution should cover not only production processes, but must be comprehensive enough to cater for other operations and logistic processes that supportproduction. In this case study, the customer has machines with a “floating feeder setup”. This means that they can add and remove material feeders from their SMT placement machines during production, and at the same time create a new material feeder setup for the next scheduled producton the same machine. Information required for this to occur:• Which feeders from the current setup can beremoved from the machines• Which new feeders need to be mounted for the nextsetup• Which material needs to be loaded onwhich feeders for on-time material delivery With this, backward planning with detailed information is required. The conventional method of searching com-ponents based on the setup sheet, loading them onto a feeder and put them on the right tracks has to be changed. The solution must improve operator’s efficiency to support continuous production or else production will halt, requiring the operator to complete the setup before continuing. Depending on the complexity of the product and amount of materials needed for the production run, the time required for a newsetup can vary from 10 minutes to two hours. Accurate planning
With such a complex set up, accurate planning is critical for successful execution. First, the planning application downloads the manufacturing orders and their delivery deadlines from the ERP system. The system will calculate the time needed for production, generate the floating setup and consider timelines in order to develop a production schedule (figure 3). This schedule will then be distributedto different users along the manufacturing workflow. Through the system, the warehouse manager can identify the list of materials required for production over time. In addition, a material preparation schedule can also be retrieved through calculating the time required for preparation. Since information about the inventory is integrated with the MES, reports about the location and quantity of the material can be easily tracked to ensure only required material is provided. With real time inventory information, the schedule is updated from the factoryprocesses signaling system. Setup preparation
The operators are equipped with a setup schedule, indicating the start time of each setup. It will also provide information on status of the materials needed, forexample: • Are the materials being prepared at the warehouse?
• Are they ready for collection?
• Will the material be ready in time to start the setup preparation? Once the materials have been collected from the warehouse, the operators will load all the components onto the respective feeders and scan them to register the materials into the system. The system will be updated with the information on the number of registered and nonregistered materials. Through a visual interface, operators are alerted if they are on schedule or not ready to support the next production run. The integrated solution linking the material warehouse manager collects material status to report it in real time. Therefore, the operator can trigger action if the materials are not ready. Changeover process
The system is managed through a visual screen with the changeover schedule. Guided by the schedule, the operator starts loading new feeders onto the track or removing feeders accordingly. At the same time, real time information about the component depletion ensures that the materials are being prepared at the warehouse or the setup preparation area. Based on the reports, the operator is able to trigger necessary activities to ensure material availability. The changeover process is managed through different LEDs on the feeders. Different LED colors indicate the actions required. For example, red flickering LEDs on the feeder indicates it can be removed from the machines. This automated process guides the operators visually, eliminates the time-consuming process of searching for components with the setup sheet, and makes the process paperless. As this case study shows, the manufacturer benefits from good process controls and streamlined processes, enjoying an additional 15 percent improvement in productivity and a reduction of 10 percent in material costs. Such solutions are no longer a fiction, but a reality. The improvement one can achieve depends, of course, on the quantity of changeovers, time spent on product changeovers, as well as the current solution. Conclusion
Manufacturing has become an extremely complex operation, and therefore to succeed at very high levels, companies must recognize the need for integrated performance solutions. Lean manufacturing is a methodology to improve manufacturing performance. To best implement it, a holistic software solution is required that has a complete product portfolio that covers the every part of the workflow of the manufacturing process and connects the shop floor with the top floor to ensure highest data accuracy, resolution and signaling. Such holistic solutions will help manufacturers implement lean manufacturing at a higher level and stay ahead of their competition. Figure 1 Figure 2 Figure 3 Table 1 Table 2 Key lean principles About the authors: Robert Huber is Director for Software Business Asia, and Kelvin Ong is Business Development Manager for Software, Asia Pacific in Siemens Electronics Assembly Systems Division | | 
