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Agile ManufacturingSeminar11

CHAPTER I

INTRODUCTION

The world as a whole is now adjusting itself to the competitive realities of a new set of

competitive standards. In the old economy competitive success was based almost exclusively on the ability

to improve productivity .In the new economy, organization and nations compete in quality, variety,

customization, timely response etc. So manufactures must be able to develop and produce customized

products rapidly to meet ever changing customer needs to be ahead of others.

Methods to meet these requirements are the basics of agile engineering. Agile Engineering or

Manufacturing is a new concept of management originating from USA aimed at carving a new path for

business enterprises. The emphasis is to make the organization quick shift in style of working to adopt the

changes in market environment in order to remain the business leader ahead of competitors. Thus the

ability to use and exploit a fundamental resource-knowledge and imagination is the impetus behind agile

organizations.

1.1 HOW DO WE GET TO WHERE WE ARE TODAY?

The industrial revolution led to mass production practices and the scientific definition of cost

accounting system. That period represented sellers market, where demand was greater than capacity. Price

was based on the cost of production and expected profit. The fixed of capital was amortized for a long

period of time, but variable costs were high and needed to be managed. The solution was simple treat

manufacturing as a cost driver by focusing on local optimization, breaking down to tasks into small simple

steps and producing high volumes of standard products at the lowest possible cost. Consequently labor was

de-skilled.

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The computer revolution dramatically changed the market characteristic. Today its the buyers market

where capacity is higher than demand. Price is dictated by the market and is not based on producersexpected profit. Manufactures must develop a balance between the external and internal measures. Their

focus is changing to global optimization from local optimization by determining what customers want and

delivering the right product.

Thus focus and advances in technology and product life which together with the high cost of

capital makes product time to market are of the major business driven for many industries. This

increasingly shorted whole resulted in the need for agility.

The Japanese who dominated the market at the middle of the 20 th century had developed their

own paradigm called LEAN MANUFACTURING .As the customers were shifting towards the Japanese

the US introduced AGILE ENGINEERING IN 1991 so as to compete with them.

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CHAPTER IIAGILE ENGINEERING-CONCEPT

AND PHILOSOPHY

Peter Drucker wrote There is only one valid definition of business purpose, to create a

satisfied customer who determines what the business enterprise has two and only two basic functions:

marketing and innovation.

Success globally means faster reach to market, sharper response to customer needs and

exploiting the resources efficiently to develop the product. The emphasis is to make the organization quick,

swift and agile in catching customers requirements and to treat it to be very purpose of business. It

requires a holistic business approach and reorganizing the organizational structure to make it cross

functional and enabling.

2.1 HOLISTIC APPROACH

Winners do not do different things, but they do things differently

In order to achieve agility in a system it is necessary to break the fragmented organizational

legacy and meaningful only in the context of the whole effort .It must be compatible on the company wide

basis .An individuals effort to excel in his job or a single department doing its best within its domain is no

more considered enough. Building up a holistic organization emphasizes not on parts but as whole. Each

part of the organization must continuously adjust and recalibrate its actions to accommodate the needs and

requirements of the whole. Holistic system of management can be thought of as the foundation of building

agile organization to be capable of quickly responding to fast changes whether internal or external, simple

or complex.

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2.2 CROSS FUNCTIONAL MANAGEMENT

Communication gap across organizational boundaries was still remaining problem number one

of the industry .It is mainly due to organizational legacy that divide a company into less and less co-

operative parts. And in the absence of cross-boundary communication, management of complex process

like new product development or increasing market share etc suffers or may require extraordinary efforts or

resource .The solution to the problem is found out to be agile engineering by adopting cross-functional

system of management

The agility of an organization depends on cross management communication. Company wide

system reorganization was put into effect. Executives are assigned multiple and cross functional problems.

This helps in sharing of ideas and concepts and hence enhancing company wide coordination.

The unique characteristics of cross-functional system can be summarized as below

1. Company wide cross department co-operation and communication

2. Focus on strategic core processes as a basis for achieving competitive results and profitability.

2.3 HIGH SENSITIVITY

Agile organizations should be sensitive enough to pick feeble signal of changes and be

responsive enough to take corrective measures instantaneously. It should be in a state of continuous

instability rather than being in a static equilibrium. This agility will come out of this vibrant and dynamic

state which instead of causing a destabilizing effect on the system would provide ability to quickly

perceive and adapt the market needs, technology, opportunities, new employee competencies, competitive

threats or new regulations.

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2.4 INTERNAL AND EXTERNAL AGILITY

Internal agility concerns itself with the ability to react quickly to changes in rapidly changing

products, processes and the physical environment of the factory. External agility is something more and

more companies are dealing with by focusing on their on competitors and forming partnerships with other

suppliers to meet overall customer needs.

The commercial and legal risks are not widely understood and most of the interest in

partnerships building has been based on forming long term commercial relationship.

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CHAPTER IIIAGILITY: A POPULAR PARADIGM

WITHIN MANUFACTURING

The paradigm of mass production has first shifted to lean manufacturing and now to Agile

Engineering to respond rapidly to change in customer demand. This radical approach challenges some

fundamental operational issues, producing high-volume item to cater for the larger segment of the

market .which also accommodates customers who went one-off, customized products without sacrificing

on lead time and cost. A shift towards an agile enterprise will require manufacturing process to be well

placed to exploit opportunities in a climate of uncertainty, unpredictability and highly turbulent market

conditions.

Agile manufacturing rests upon three supporting pillars.

1. Learning in Agile organization.

2. Skilled people-Role of HRD.

3. Intelligent and flexible manufacturing technology.

3.1. LEARNING IN AGILE ORGANIZATIONS

Management is all about acts to achieve goals. Learning is the key to achieve these goals.

Learning is a process which is inevitable to all the organizations either deliberately or without any focused

effort.

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3.1.1 ORGANISATIONAL LEARNING

The organizational learning can be termed as increasing capacity of an organization to take

effective actions. Organizational learning is complex, as it is a large collection of diverse individuals.

Primary source of individual learning is through experimental learning is through experimental learning as

shown below.

Fig 3(A)

The above cycle gets modified in the case of organizational learning as follows.

3.1.2 LINKAGE OF LEARNING WITH PERFORMANCE

Learning without thought is labor lost and thought without learning is perilous Knowledge by

itself produces by itself produces nothing .It can become more productive only when it is integrated into a

task. And that is why knowledge society of organization.

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Learning curve is defined as empirical relationships between the numbers of units produced and

the numbers of labor hours required to producing them. The average labor hours will come down as units

produced goes up as shown below.

The only expertise these days fast changes is the expertise to garner expertise.

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3.2 ROLE OF HUMAN RESOURCE DEVELOPMENT IN AGILE

MANUFACTURING-A CASE STUDY

A mid-sized engineering consulting firm uses a web based optimization solution to give

employees more options for self-service and increase the productivity of its human resource staff.

3.2.1 THE CHALLENGE

Agile Engineering a mid-sized consulting a mid size consulting firm faced a large backlog of

opportunities for new projects but was struggling to build an adequate work force to handle the work load.

From bringing new hires on broad, to keep company needed to enhance its workforce management tools

and processes.

3.2.2 THE SOLUTION

Agile Engineering launched a work force optimization solution using the internet to advantage to

give employees quick access to the information they needed to their jobs and to simplify and enhance a

wide range of human resource activities. Employees themselves now can complete processes that are

required a phone call or letter to human resources with a turn around of several days in minutes.

Fig .3(B)

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3.2.3 THE STRATEGY AND BENEFITS

The work force optimization strategy for Agile centered on

Communications: Through a new company wide intranet, Agile Engineering gave employees a single,

web based window into their company policies, directories etc.Making training available on line enabled

employees to improve their skills at their convenience, without costly travel to the headquarters and without

disrupting normal work schedules. This helped to respond more quickly to problems and opportunities. Transaction related solutions: Agiles engineers work in three remote sites and frequently from their

homes or customer sites. The workforce optimization solution eliminates the isolation of these remote

employees by allowing them to use any web connection to update their benefits choices, report expenses

and complete performance reviews at their convenience.

Strategic HR activities: The work force optimization solution provided human resources with new tools

to finding and hiring skilled employees. Using internet agile was able to reach candidates all over the world.

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3.2.4 RESULTS

1. Reduced Costs: Agile saw dramatic reductions calls to HR staff about routine matters. Online training

services helped reduce travel and facilities cost. The firm also reduced paperwork and costly error in tasks

such as expense reporting, benefits, adjustments and hiring.

2. Empowered Employees: Employees on the Agile network can take control of their careers and benefits

information by receiving and manipulating their personal employment records on line, from the office or

home.

3. Improved Productivity: With the flexibility to find the needed information in one place, available at

anytime anywhere, Agile employees can focus on their core activities. For HR,workforce optimization

solution reduce routine task and allow more time for finding, hiring and retaining the best possible

employees. This scenario keeps the company competitive, reduces cost and increases profitability.

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3.3 INTELLIGENT AND FLEXIBILE MANUFACTURING TECHNOLOGY

AGILITY IN AUTOMOTIVE SYSTEMS

With the Indian automobile industry now open to global players, competition has set in and the

customer has a wide choice now. The mechatronics application in automotives has revolutionized theautomobile industries. Computers are the electronic devices that stores data, manipulate them through

arithmetic and logical operations and an output according to the instructions already given to it.

3.3.1 FUNCTIONS OF MECHATRONICS IN AUTOMOBILES

A single microprocessor in an automobile may do the following

1. Carburetor/Fuel injection control

2. Spark timings

3. Idle speed of the engine

4. Cruise control

5. Air management

6. Exhaust control

7. Transmission control

8. Instrumental panel display

9. Self-diagnosis of the system

10. Passenger safety aspects.

The brain behind all these functions is a small digital computer which contains the logic for the

entire system.

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CHAPTER IV

METHODS TO ACHIEVE AGILITY

There are no well established road maps to achieve agility; however, there are four "ever brightening"

guidelines to start the Agility journey.

1. Enriching the customer

Selling solutions -- providing an unlimited variety of products, information, and services

2. Cooperating to enhance competition

Internal -- cross-functional teams, empowerment

External -- managing the supply chain

3. Organizing to manage change and uncertainty

Rapid reconfiguration of plant and facilities

Rapid decision making - shallow empowered

4. Leveraging people and information

Distribution of authority, resources, and rewards

If successful, the key characteristics of Agile Manufacturing in your company will be:

Customer-integrated process for designing, manufacturing, marketing, and supporting all products and

services

Decision making at functional knowledge points not in centralized management "silos"

Stable unit costs (low variability) no matter what the volume

Flexible manufacturing -- ability to increase or decrease production volumes at will

Easy access to integrated data whether it is customer-driven, supplier-driven, or product- and process-

driven

Modular production facilities that can be organized into ever changing manufacturing nodes

Data that is rapidly changed into information that is used to expand knowledge

Mass customized product versus mass produced product

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CHAPTER V

What's New or Different?

Agile Manufacturers must recognize the volatility of change, and put mechanisms in place to deal with it.

They must move from being manufacturing-driven to customer-drive, and they must also realize that

customers buy customers won't pay a premium for quality -- it's assumed.

Agile Manufacturers must partner with customers, suppliers, and competitors (cooperate and compete), and

understand that the soft side of business (trust, empowered teams, risk taking, reward and recognition) must

drive the entire process.

In an Agile environment, information is the primary enabling resource. Firms must know their customers,

products, and competitors.

What's new or different about this list? Not much! Some new terminology perhaps.

What is new, however, is the packaging and intensiveness by which a company tries to reinvent itself, This is

not 5% continuous improvement.

Agile Manufacturing concepts are the key to future competitiveness, but many of these concepts are still in the

development state. No one book or seminar will bring you to the "Fountain of Agility."

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CHAPTER VI

AGILE AND LEAN MANUFACTURING

ADVANTAGES OF AGILE

6.1 COMPARISION

The two concepts are more or less same in certain areas.

PRINIPLES AGILE LEAN

Delivering values to customer High High

Being ready for change Yes Yes

Valuing human knowledge and skills High High

Forming virtual relationships Short and flexible Long and rigid

Table 1

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6.2 ADVANTAGES OF AGILE ENGINEERING

1. The first is the change from standardization to post standardization .Industrial society was characterized

by high volume production of small variety of items. An information society however is capable of small

production runs of multiple items which match individual needs.

2. The second is the shift from specialization to collaboration, with many aspects of society becoming

increasingly composite and multidisciplinary.

3. The third is the shift from constraints of time and place.

4. The fourth is the trend away from concentration and diversification.

5. From centralization to decentralization

6. Finally leading to sustainability in manufacturing

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CHAPTER VII

Real world example

The Industry: Japanese car makersJapanese car makers can presently deliver the 10 day car right now, but are currently working on

techniques in congruency with Agile Manufacturing to produce the three day car.

Challenge #2) Nissans Intelligent Body System, a Lego-block approach that favors existing over newly

designed body components, leaves tooling as the only major expense for a new model.

The goal: To produce the three day car, three days from customer order for a customized car to dealer

delivery .

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CHAPTER VIII

CONCLUSION

The new economy requires management technologies, work force that are flexible and roboust,

agile engineering. The new markets standards would not have been possible without an equally new role

for technology. Thus agile manufacturing techniques has fully exploited the flexible new technology, by

using it in conjunction with equally flexible workforce and organizational formats, have raised the level of

competition and increased the range of competitive standards.

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REFERENCES

1. www.agilesolutions .com

2. www.mit. org

3. Conferences on Agile Engineering

4. Daniel Whitney, Agile Pathfinders A Progress Report, MIT Press, 1995

5. www.agile.com

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