The One Worker Assembly Line

JUNE 5, 2014

At Japanese manufacturer Roland DG, assembling thousands of parts into wide-format printers is as easy as coloring by numbers, writes The Wall Street Journal(June 2, 2014). That’s because Roland DG makes everything from billboard printers to machines that shape dental crowns using an advanced production system known as “D-shop.” Under this method, workers in single-person stalls assemble products from start to finish, guided by a 3-D graphic and using parts delivered automatically from a rotating rack. Every worker is capable of assembling any variation of the company’s 50 or so products.

In 1998, Roland became one of the first companies in Japan to abandon the assembly line in favor of one-person work stalls modeled after Japanese noodle stands. With orders coming in smaller and smaller lots, Roland decided it needed a manufacturing system in which a single worker could build any one of its diverse products. On a recent day, one employee was assembling from scratch an industrial printer that ultimately would be more than twice her size and weigh almost 900 pounds, while another was assembling a dental-crown milling machine.

A computer monitor displays step-by-step instructions along with 3-D drawings: “Turn Screw A in these eight locations” or “Secure Part B using Bracket C.” At the same time, the rotating parts rack turns to show which of the dozens of parts to use. Meanwhile, a digital screwdriver keeps track of how many times screws are turned and how tightly. Until the correct screws are turned the correct number of times, the instructions on the computer screen don’t advance to the next step. The system is so simple, say managers, that nearly anyone can assemble products anywhere. The computer even gives workers a pat on the back at the end of the day, with the message, “You must be tired, and we thank you.”

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.comProfessors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

American Manufacturing Heads to Mexico

JUNE 2, 2014

mexicoWith labor costs rising rapidly in China, The New York Times (June 1, 2014) reports that American manufacturers of all sizes are looking south to Mexico with an eagerness not seen since the early years of the NAFTA in the 1990s. From border cities like Tijuana to the central plains where new factories are filling farmland, Mexican workers are increasingly in demand. American trade with Mexico has grown  30% since 2010, to $507 billion, and foreign investment in Mexico last year hit a record $35 billion. Over the past few years, manufactured goods from Mexico have claimed a larger share of the American import market, reaching a high of about 14%, while China’s share has declined.

“When you have the wages in China doubling every few years, it changes the whole calculus,” says Chris Wilson, at the Mexico Institute in D.C. “Mexico has become the most competitive place to manufacture goods for the North American market, for sure, and it’s also become the most cost-competitive place to manufacture some goods for all over the world.”  Wilson calls for a focus on “globally literate workforces in both countries.”

Many American companies are expanding and spending billions in Mexico — including well-known brands like Caterpillar, Chrysler, Stanley Black & Decker and Callaway Golf. Economists say that the U.S. benefits more from outsourcing manufacturing to Mexico than to China because neighbors tend to share more of the production. Roughly 40% of the parts found in Mexican imports originally came from the U.S., compared with only 4% for Chinese imports.

Yet Mexico is still a country of vast differences in efficiency and education, where only a small minority of the population has the training needed to compete with the world. The kinds of companies succeeding now in Mexico are those big enough to manage their own factories and those that did not give up their technical knowledge by outsourcing to China. To draw more companies now, experts say, Mexico and the U.S. will need to be more focused on sharing labor and moving products.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.comProfessors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

Factory Rebound’s Winner–Mobile, Alabama

MAY 31, 2014

Austral has increased the workforce at its Mobile shipyard to 4,100 from 900 in 2009

The U.S. has added about 650,000 factory jobs since their numbers rebounded after the recession, putting manufacturing workers at 12.1 million and reversing a long decline in such jobs, reports The Wall Street Journal (May 30, 2014). But uneven growth has created regional disparities in the nation’s overall economic recovery.

Mobile, Alabama is among the winners. Shipbuilder Austral Ltd.’s facility here is busy seven days a week as workers piece together enormous aluminum sheets in a space the size of 13 football fields. Airbus and BAE Systems, too, are adding factory jobs here. Mobile created more manufacturing jobs than all but 15 U.S. counties in the past 4 years. U.S. factory-job gains—driven by a range of factors from cheaper domestic energy to the auto-industry recovery—have concentrated in pockets since the recession, particularly in the Southeast and Midwest.

Mobile’s success illustrates some common patterns: Often, companies have added jobs in states with “right-to-work” laws—which allow workers in unionized workplaces to opt out of paying union dues—and where taxes are relatively low, in counties where governments provide large incentives and strong vocational education, and in places with access to ports or other transport hubs.

Austal chose Mobile because of location, waterfront property, cooperative local and state governments, low taxes and low union membership. Alabama’s government sponsored training for Austal workers and built it a $12 million training center.

Airbus Americas, hiring about 1,000 new employees for its first U.S. commercial assembly plant, didn’t consider any Northern states as finalists, as it was looking for a port to which it could ship airplane parts for assembly. Alabama’s right-to-work rules were a key attraction. Alabama gave Airbus tax credits and cash grants valued at $158 million to build in Mobile—including a $6 million training center. “Alabama had it all,” says the Airbus chairman. “I’m not sure the rust-belt states have the same attitude.”

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.comProfessors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.