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Configuring Collaboration for Le

VIEWS: 5 PAGES: 9

									                    Configuring Collaboration for Lean Mass-Customization Manufacturers

              Tipping organizational silos to achieve internal collaboration through a repository
                     of communication syntax restores flow and balance to the enterprise
                     By: Gene Thomas, Founder Emeritus, Configuration Solutions LLC           01/06

The Two Biggest Challenges Facing a Silo Based Organization

In the typical world of product and process configuration, the natural order for the to-order mass-customization
oriented manufacturer is often out of balance. They often find themselves in a silo mentality whereby each
core area of their to-order manufacturing company is operating autonomously. Challenging the enterprise is the
need to directly address the ineffective, or at best, forced communication between organizational entities.
There are two fundamental flaws threatening the entire flow of operations: 1.) procedural and configurator
business rule logic maintenance and responsibilities exclusive to each silo's functions, and 2.) a skewed effort-
to-benefit ratio for the silo’s organizational investment Let’s explore each of these issues, and how the business
and configuration rules “ecosystem” can be better designed and simplified to achieve balance.
Four functional silos usually make up the to-order mass-customization manufacturing environment:
    1. Quotations, Publishing and Cost Estimate Revisions
    2. Customer Sales Order Management
    3. Product and Process engineering data development and structuring
    4. Simplification of Lean Focused Factory Flow

Silo Boundaries: Without decisive leadership, each of these areas tends to develop and maintain their own
procedural business processes and configuration rules unique to the responsibilities of their respective
organizations. Lacking the support of industrial strength software functionality, whereby rules based
transactional processing can be simplified and maintained by actual users, (as opposed to programmer types),
islands of isolated departmental communication manifest themselves. For example, the design engineering
staff writes configurator rules for bills-of-material (BOM’s) and manufacturing engineering writes rules for
routings/instructions tied to BOM componentry under the product and process silos. The customer service order
management personnel create the pricing rules and the sales-marketing personnel who are responsible for
quotes; publishing and continuous cost estimate revisions often represent a different part of the marketing
organization. What results are organizational microcosms, each doing their own thing and who operate entirely
oblivious to the impact of their rules on the whole information flow and business process of the operation.

Silo ROI: The second issue plaguing the configuration-oriented enterprise is a skewed benefit/cost/effort ratio
in each of these silos. For the amount of effort expended by user-organizations within these silos, there is rarely
an equivalent or proportional return in relation to their investment. As an example, the proportional rate of
return is especially poor for the product and process engineering function, where 40 percent of the company’s
effort (Fig # 1) has been consumed in structuring computerized BOM’s for the past 40 years. Engineers now
investing in developing configuration rules for generating these bills and routings on-the-fly, are likely to yield
only a 10 percent return (Fig # 2) to their own silo organization. But, their work product is utilized by most
everyone else in the enterprise! On the other hand, customer order management requires only minimal, (10
percent), effort in order to develop validation and constraint rules to prevent specification errors, with double
the payback, (20 percent) to the downstream operations. It’s a high return area because formulating the correct
rules up front prevents costly errors that can result in very high downstream rework or field repair surprises.
The sleeper silo is in the manufacturing arena where shop floor simplification gets underway with a lean
focused factory family production orientated cellular layout, that can reduce stocking levels and allow for
visually replenishing component inventory. Configuration software can now directly drive real-time constraint
based shop floor scheduling and sequencing (broadcasting), directly from the sales order entry process thus
reducing cumbersome support normally required for MRP cycles for a whopping 35% return.
                                                                                           Fig. # 1

The Consequences of Imbalance – Why “Tipping” Works
In the process of natural evolution, the ecosystem must be in balance. Just as in the manufacturing universe,
those processes that produce the lowest value for the highest amount of effort ultimately can endanger the silo’s
participation and cause havoc within the entire enterprise. There are several consequences to configuration
imbalance, including:
! Lack of collaboration between vital functional areas (i.e. engineering and marketing) that require consistent
    interaction.
! Disrupted workflow, resulting in productivity losses.
! Higher than necessary inventory levels.
! Costly reporting inaccuracies and intense conventional measurement metrics (i.e. efficiency reporting by
    work order operation should often be eliminated in lean focused factories).
! Inflexibility of operations to respond to specials or newly configured orders.
In complex, to-order manufacturing environments, the natural order of the enterprise must be restored to remain
agile and avoid extinction. Here’s where “tipping” things can be beneficial. Envision each of the four silos
interacting and sharing a continual dialog. Like a canister filled with water, when you tip over a silo, it spills
onto the next and so on down the line. Soon, a steady stream of communication results, dissolving previous
barriers and encompassing all operations.




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                                                                                                   Fig .# 2

The Dictionary Approach: Collaboration through Communication
What’s the key to achieving a high level of unity and collaboration? It is a common information thread
throughout the entire manufacturing environment and extended enterprise (customer thru vendor), supply chain.
The solution lies in building a simplified common rule base, or “dictionary” that enables all functional silos to
speak the same language, follow the same coding system, and achieve greater return on effort deployed. Each
function is represented equally in the rule logic definition and creation process up front, and takes ownership in
defining how the rules will be constructed to leverage their individual functions and ultimately contribute to the
whole enterprise.

Today’s advanced configuration technology provides a dictionary-type solution through a rules-based approach
that facilitates:

!   A universal “language” unique and customized to their own product lines that allows disparate functions
    (engineering and marketing) to freely speak to one another using common nomenclature, right down to the
    finest detail definition.
!   A lexicon of rules understood throughout the enterprise to conduct open dialogue between order
    entry/factory floor/supplier/distributor/customer, etc.
!   Simultaneous broadcast of information from the “dictionary” through a simplified bottom-up, browser based
    search problem definition, instead of a restrictive top-down and pre-defined tree explosion approach that
    fails when extreme structural product complexity occurs.

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In the past, highly technical, information technology (IT) specialists who reveled in the complexities of
configurators and object-oriented language typically wrote rules. Today, simplified configuration technology
engages the participation of all levels of marketing and manufacturing staff so that users can essentially be in
command of their own return on investment, independent of IT programming involvement. Rules can still be
highly customized around individual functional areas, when they can be understood and integrated across the
entire organization.

Restoring Order with Rules

This “self-written” rules movement has given rise to the universal dictionary concept – something that fits
readily in the organization’s natural order. The dictionary incorporates simplified structural coding, based on a
common language that acts as the glue that binds all of the silos together. Let me explain by using an example
to which most everyone can relate – voltage. First of all, agreement needs to be made on the coding of
“voltage”. It could be drastically abbreviated as “V”, more readable as “VOLT”, or completely expanded as
the description “VOLTAGE”. Option choices (answers) also require similar definition and organizational
consensus.

As the joint agreement of syntax is finally defined (it is often humorous observing the arguments that ensure
over such simple decision processes), it is entered into the configurator database for all to easily use in a drag-
&-drop rules helper wizard. Here is your first organizational issue, who should be keeper of the nomenclature
syntax to insure some degree of consistency without too much micro-management? Often, sub-organizational
functions should retain authority to initiate their own specialized syntax such as CAD dimensional attributes.
But later, they might conflict with marketing’s interest in dimensions showing up on parametric or layered
submittal drawing displays for web-based customer selections, i.e., in fractions, decimals, and metrics with
tolerances.

It may be important to consider the balancing of rule writing conveniences when assigning new nomenclature,
versus utilizing coding already common in a particular industry and imbedded in the company’s product sales
catalogs. It is often very risky to try to change terminology imbedded in existing catalogs, but sometimes the
implementation of a Configurator provides a unique opportunity to finally address cumbersome part numbering
schemes. In addition to voltage being required to specify an option, the product line may require the selection of
phase, (single or three).

Now, validation rules can be added to insure proper click-by-click selections, (or validated automatically if the
order is received as an externally generated EDI transaction), to restrict the behavior of questions and answers.
These are called “exclusion rules” or “constraints” and reside in the configurator database dictionary associated
with each option answer or combinations/omissions of answers.

Upon selection via the configurator’s user maintained interface, representations of the selected features are
automatically maintained representing the accumulated specifications of the configured line item. During the
selection process, in any sequence of model, or voltage-phase, or phase-voltage, the selection of anything
affected by option rules already selected would cause any excluded or constrained combination to be either
made inactive or hidden form view altogether thus preventing further illogical selections. As a result,
misinformation does not spill over into other functional silos to create confusion or disruption in operations.
The user is not expected to view or read these specifications, which can become quite extensive. Flexible report
writer summaries display them, with expanded descriptions, for convenient viewing in a “window sticker”
format (Fig. # 3).

The above example can bring rise to the potential organizational conflicts mentioned earlier. The voltage
portion of the exclusion rule might be an engineering function, but the model availability for 460 volts might be
a marketing function. If the rule developers can work together, then the conditions may be expressed in a single
rule, or the rules can be built in separate steps within the rule sets---have it either way!
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Configuration Technology – a Proactive, Real-Time Alert Based System

An industrial-strength configurator acts as a proactive, real-time alert based solution that promotes natural
balance and many benefits to the entire organization, including:

   !   Collaboration – marketing/engineering/ purchasing/manufacturing/, accounting/ and other “warring
       factions” that normally don’t communicate well, now have a common hub around which to rally. They
       can share responsibilities that contribute to greater return on effort invested – to benefit the whole.
       Complete specifications associated with a configured line item are available to all those authorized to
       see secured portions of selected values via a standard web browser. This collaboration activity can
       begin easily and continue to be refined to provide support for:

       !    1) continuous revisions of pricing & cost estimate changes
       !    2) proposal/ quote revision structuring/ restructuring/template document publishing
               with customized inserts and automatic Table-of-Contents sequencing,
       !    3) booking and/or archiving sold line-items, and lost quotes
       !    4) engineering change effectivity date functions for product history
       !    5) selective shop floor progress reporting transactions
       !    6) shipping and billing status
       !    7) material and labor backflushing transactions
       !    8) sales & engineering product analysis based on any attribute
       !    9) a field repair repository of upgraded specifications and feedback data

       These specifications can be archived and form the basis for all manner of analysis and data mining.

   !   E-mail notification during selected transaction processes based on business rules

   !   Work-Flow element generation for internal tracking and evaluations of unique configured specifications

   !   WIP reductions –focused factory cells now can view the actual quoted and booked backlog
       specifications (including factory orders with BOM & Routing/Instructions) to anticipate time-phased
       pegged demand and execute the manufacture of configured orders.

   !   Inherent accuracy –with all approved users having access to the status of line-items, the peer pressure
       fosters accuracy and completeness of transactions necessary to support “promises to deliver, and
       deliveries as promised”, resulting in aggregated customer benefits.

   !   Flexibility – capacity to take on new & changed orders and immediately account for demand surge
       planning and expediting. Remember, the configurator is the first sub-system to know what demands are
       required for the product line item.

   !   Simplified/ eliminated cumbersome ERP functionality – concentration of real-time broadcasting of
       line item specifications and status to lean focused factory cells, can reduce and eliminate much of the
       WIP order posting and scheduling/sequencing functionality for made-to-order product lines in a pull-
       based focused factory flow.

   !   Enterprise wide visibility – with the constantly updated order line specifications (Fig. # 4) available via
       a Web browser, secured and selected product data can be displayed to internal silo organizations as well
       as outside customers and suppliers. The selection criteria for “viewable” data is easily maintained, and
       modified as customer and business requirements mature. Note line # 11 where the secured customer has

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    replied directly to the releasing conditions of the order hold status. Rules can also determine preferred
    language and affect the display of viewable data based on customer preferences, (note line # 7).

!   Lean, To-Order Focused Factories practicing mass-customization are often characterized as trending
    toward “lower velocity, higher diversity” from a transactional standpoint. WIP labor posting by
    operation for progress or accounting is generally eliminated, replaced by order status reporting of only a
    few key production events. As a result, very few feedback transactions, most of which can be entered
    through the configuration status system, can be updated for subsequent and secure web based inquiries
    (note line # 2 as CUSTOMER SECURED WEB INQUIRY DISPLAY).

!   Under the control of only aggregated usage rates, replenishment of stocked components is visually
    triggered by Kanban, reducing dependency on the accuracy of on-hand balances & cycle counting. Only
    key stocked and fabricated components, (less than 5% of part numbers) need to be pegged to their time-
    phased demand source coming from actual customer orders. The demands are built directly and
    maintained in real-time from the configuration process, and saved until backflush transactions reduce
    inventory and provide usage variances. For adequate control of capacity using pull-based focused
    factory family lines, only the beginning, (or feeder) stations need to be sequenced to control scheduling
    and customer order promising. The need for advanced scheduling techniques (APS) is realistically
    viewed as overkill without substantiated ROI.




                                                                                                       Fig. # 3




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   !   Feature Pull Result for CYL_COLOR (Only the Detail Description column with ‘resolved’
       (inserted) attributes is displayed)

                                                       “Window Sticker” Detail Description
                                          Durable Model Cylinder w/Options
                                          SmartPart # OUT: DS3210MS1C1
                                          CUSTOMER SECURED WEB INQUIRY DISPLAY
                                          Accepted Order
                                          Name Plate: Gene Thomas
                                          Serial #: A-123456
                                          Cut-Tickets Printed
                                          Prelevare da Magazzino Ricambi (Multi-Language)
                                          Assembly List Printed
                                          3 Qty Shipped
                                          Factory Hold Until Customer Confirmation
                                          Customer Confirmation to Release Factory Hold (Secured
                                          Customer Initials-GT)
                                                                                                     Fig. # 4

A rules-based dictionary is intended to streamline the communication of the specifics of a made-to-order
product, thereby promoting simplification and focused factories that foster lean manufacturing and mass-
customization. The configuration function is the first to be executed and can now, immediately, be taken right
down to the factory floor. In the past, shop order data had to be uploaded into an MRP system first. Now,
configuration technology can bypass the MRP step and produce “MRP-like” output for bills-of-material &
routings, manufacturing orders, and sequenced dispatch list displays, etc. so that even the most highly
customized products can be structured on the fly in true make-to-order fashion. Since family product lines are
made-to-order, now “to order” shop instructions can be broadcast directly to the cellular organized shop floor as
they are called for from the configurator’s rules by the cell operators.
.
The key is that work orders or shop paper are simultaneously broadcast out of the configurator directly to the
shop family cell. The dictionary provides the product specifications, and in turn, the rules associated with
those specifications provide the manufacturing staff with the part numbers, routing operations and all the critical
component data required to respond to those specifications and produce the product.

Dynamic Broadcasting Directly “Feeds” Family Cells on the Floor

The dynamic broadcasting functionality of supplying the “direct feed” to the family cells emulates the best
practices of the automotive industry, where broadcasting stations are set up for each line/cell to specify the
sequence of which option or colors to use as the ordered product arrives. The real-time configurator uses a
simplified accelerated bottom-up search approach vs. an explodable view requiring pre-structural pseudos &
phantoms. It fosters the use of flattened BOM’s without the burden of excessive subassembly part numbers and
drawings for in-process stations or service part kitting.

When information is relayed to family line cells, instructions are broadcast to the various stations on the line, --
as called for in waves – as to what goes into a cycle grouping of product as it passes through set-up related
sequencing. All functions across feeder lines are working in tandem to a common assembly or packaging
scheduling sequence. Flow is achieved, as each line maintains a family structure focus. Classic lot sizes and
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“to-order” stocking inventory levels disappear. Mixed product models with a mix of options can be run down
the same family line, and products can be readily customized because the rules stipulate the components as well
as the process at each station cell.

The advantages in adopting a rules-based configuration approach are significant to the bottom line. Heightened
flexibility, streamlined scheduling and slashed inventory levels all add up to greater margins. One of the most
tangible returns is a reduction in cycle times – by as much as 90%. One of our customers, a pump manufacturer,
was able to cut cycle time from 13 weeks to 3 weeks and finally to 1 week in their second year of operation.

Bridging the Gap with CAD – the Two Faces of Engineering

In some cases, the dictionary may need to be more of a “pictionary.” Mass-customization manufacturers often
rely on graphic depictions of products from computer-aided design (CAD) systems. Engineering talent, which
used to be buried at the back of the factory, has been increasingly summoned by marketing to generate product
visuals for use on the web (i.e. for online customer catalog options, customizations). Stretched between their
new role as part of the extended marketing team and their traditional function in design and numerical control,
engineers are now being pulled both ways. The “pictionary” concept has helped to evolve the role of the classic
engineer – adding greater value to the operational continuum where silos share resources for the common good.
Most of the Q/A’s, (specification attributes), initially captured to configure validation, pricing, BOM’s &
Routings/Instructions, can be used to generate dimensional CAD templates or submittal drawings typically
engineered in support of marketing efforts—just more collaboration!

Getting Started in Three Simple Steps

Getting started on configuring your manufacturing operations to achieve a natural order is easier than you think.
Following are three simplified steps:

1. Start small, think big – tackle your most problematic silos up front, to get the best return for the
   investment. Where are your biggest “problem silos” and where is your greatest return on the energy of your
   investment? Prioritize the proper resources up front to avoid surprises later. When your priorities are in
   order, the enterprise should then be controlled to naturally evolve. At the end of the day, there is no match
   for cross-silo education and a conference room pilot and training for a thorough understanding of
   configuration. The rest will take care of itself.

2. Play by the rules – define and mandate that everyone participates and follows the same common language.
   It starts with the quote and moves all the way to finished product and to field repair support. Successful
   communication between disparate functions, (marketing and engineering, for example) results when
   everyone sets the rules and follows them together. In the past, marketing departments have often been
   enamored by glitzy “front-end” sales configurators that focused on fancy graphics and pricing, but neglected
   or could not deal with the engineers or the factory on the back end. Remember that “end to end” is the
   name of the game. Solutions that elicit involvement and ownership from all contributing functions to
   achieve a continuum will win out. If I seem to be repeating this theme, you are getting the message!

3. Drive out extinct processes – natural selection is based on survival of the fittest. Those processes, which
   can no longer stand up to a critical review and are found to drain the enterprise, will quickly become
   branded as non value-added tasks are eliminated. Configuring your enterprise requires an honest look at
   how silos are structured, and what benefits each function can achieve balanced against the effort invested.
   A rules-based approach with a simplified common dictionary provides a vehicle to help strengthen the
   organization’s support for the things that really need to be addressed. It brings the staff of silo organizations
   together to identify the weakest links and clearly communicate realistic priorities.


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In summary, the end result of proper enterprise configuration is a manufacturing universe that is in harmony and
can naturally evolve as operations expand. These benefits outweigh the efforts because enterprise business
processes are in sync, not compartmentalized in silos. While functional silos may continue to exist, a renewed
sense of collaboration brings vital energy to ensure that the organization moves forward as a whole.



Gene Thomas, Founder Emeritus, Configuration Solutions, invented IBM's BOMP (Bill-of-Material/ Where-
Used Processor) and authored the first two MRP packages, LAMP & PICS, in the ‘60s. An IE graduate of Iowa
State, he has been founder of several MRP and configurator software firms, past president of the Baltimore
APICS Chapter, and is listed in the 1981 edition of Marquis Who’s-Who in Finance & Industry.




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