Business firms generally choose to compete within one or two areas of strength. These areas of strength are often referred to as distinctive competencies, core competencies, or competitive priorities. Among the options for competition are price (cost), quality, delivery, service, and flexibility. An ever-increasing number of firms are choosing to compete in the area of flexibility. Generally, this has meant that the firm's major strength is flexibility of product (able to easily make changes in the product) or flexibility of volume (able to easily absorb large shifts in demand). Firms that are able to do this are said to have flexible capacity, the ability to operate manufacturing equipment at different production rates by varying staffing levels and operating hours, or starting and stopping at will. Specifically, manufacturing flexibility consists of three components: (1) the flexibility to produce a variety of products using the same machines and to produce the same products on different machines; (2) the flexibility to produce new products on existing machines; and (3) the flexibility of the machines to accommodate changes in the design of products.
A flexible manufacturing system (FMS) is a group of numerically-controlled machine tools, interconnected by a central control system. The various machining cells are interconnected, via loading and unloading stations, by an automated transport system. Operational flexibility is enhanced by the ability to execute all manufacturing tasks on numerous product designs in small quantities and with faster delivery. It has been described as an automated job shop and as a miniature automated factory. Simply stated, it is an automated production system that produces one or more families of parts in a flexible manner. Today, this prospect of automation and flexibility presents the possibility of producing nonstandard parts to create a competitive advantage.
The concept of flexible manufacturing systems evolved during the 1960s when robots, programmable controllers, and computerized numerical controls brought a controlled environment to the factory floor in the form of numerically-controlled and direct-numerically-controlled machines.
For the most part, FMS is limited to firms involved in batch production or job shop environments. Normally, batch producers have two kinds of equipment from which to choose: dedicated machinery or unautomated, general-purpose tools. Dedicated machinery results in cost savings but lacks flexibility. General purpose machines such as lathes, milling machines, or drill presses are all costly, and may not reach full capacity. Flexible manufacturing systems provide the batch manufacturer with another option—one that can make batch manufacturing just as efficient and productive as mass production.
Stated formally, the general objectives of an FMS are to approach the efficiencies and economies of scale normally associated with mass production, and to maintain the flexibility required for small- and medium-lot-size production of a variety of parts.
Two kinds of manufacturing systems fall within the FMS spectrum. These are assembly systems, which assemble components into final products and forming systems, which actually form components or final products. A generic FMS is said to consist of the following components:
The potential benefits from the implementation and utilization of a flexible manufacturing system have been detailed by numerous researchers on the subject. A review of the literature reveals many tangible and intangible benefits that FMS users extol. These benefits include:
The savings from these benefits can be sizable. Enough so that Ford has poured $4,400,000 into overhauling its Torrence Avenue plant in Chicago, giving it flexible manufacturing capability. This will allow the factory to add new models in as little as two weeks instead of two months or longer. Richard Truett reports, in Automotive News, that the flexible manufacturing systems used in five of Ford Motor Company's plants will yield a $2.5 billion savings. Truett also reports that, by the year 2010, Ford will have converted 80 percent of its plants to flexible manufacturing.
Despite these benefits, FMS does have certain limitations. In particular, this type of system can only handle a relatively-narrow range of part varieties, so it must be used for similar parts (family of parts) that require similar processing. Due to increased complexity and cost, an FMS also requires a longer planning and development period than traditional manufacturing equipment.
Equipment utilization for the FMS sometimes is not as high as one would expect. Japanese firms tend to have a much higher equipment utilization rate than U.S. manufacturers utilizing FMS. This is probably a result of U.S. users' attempt to utilize FMS for high-volume production of a few parts rather than for a high-variety production of many parts at a low cost per unit. U.S. firms average ten types of parts per machine, compared to ninety-three types of parts per machine in Japan.
Other problems can result from a lack of technical literacy, management incompetence, and poor implementation of the FMS process. If the firm misidentifies its objectives and manufacturing mission, and does not maintain a manufacturing strategy that is consistent with the firm's overall strategy, problems are inevitable. It is crucial that a firm's technology acquisition decisions be consistent with its manufacturing strategy.
If a firm chooses to compete on the basis of flexibility rather than cost or quality, it may be a candidate for flexible manufacturing, especially if it is suited for low- to mid-volume production. This is particularly true if the firm is in an industry where products change rapidly, and the ability to introduce new products may be more important than minimizing cost. In this scenario, scale is no longer the main concern and size is no longer a barrier to entry.
However, an FMS may not be appropriate for some firms. Since new technology is costly and requires several years to install and become productive, it requires a supportive infrastructure and the allocation of scarce resources for implementation. Frankly, many firms do not possess the necessary resources. Economically justifying an FMS can be a difficult task—especially since cost accounting tends to be designed for mass production of a mature product, with known characteristics, and a stable technology. Therefore, it is difficult to give an accurate indication of whether flexible manufacturing is justified. The question remains of how to quantify the benefits of flexibility. In addition, rapidly-changing technology and shortened product life cycles can cause capital equipment to quickly become obsolete.
For other firms, their products may not require processes at the technological level of an FMS. IBM found that a redesigned printer was simple enough for high-quality manual assembly and that the manual assembly could be achieved at a lower cost than automated assembly. Potential FMS users should also consider that some of the costs traditionally incurred in manufacturing may actually be higher in a flexible automated system than in conventional manufacturing. Although the system is continually self-monitoring, maintenance costs are expected to be higher. Energy costs are likely to be higher despite more efficient use of energy. Increased machine utilization can result in faster deterioration of equipment, providing a shorter than average economic life. Finally, personnel training costs may prove to be relatively high.
For some firms, worker resistance is a problem. Workers tend to perceive automation as an effort to replace them with a tireless piece of metal that does not eat, take breaks, or go to the bathroom. To combat this perception, many firms stress that workers are upgraded as a result of FMS installation, and that no loss of jobs ensues. Despite any problems, use of flexible manufacturing systems should continue to grow as more firms are forced to compete on a flexibility basis and as technology advances. It has shown many advantages in low- to mid-volume, high-mix production applications. Future systems will probably see lower and lower quantities per batch. FMS can somewhat shift emphasis in manufacturing from large-scale, repetitive production of standard products to highly-automated job shops featuring the manufacture of items in small batches for specific customers. The increased availability of flexible manufacturing technology will also give multi-product firms more choices of how to design production facilities, how to assign products to facilities, and how to share capacity among products.
Fliedner and Vokurka, in their Production and Inventory Management Journal article on agile manufacturing, define agile manufacturing as the ability to successfully market low-cost, high-quality products with short lead times (and in varying volumes) that provide enhanced customer value through customization. An agile firm manages change as a matter of routine. The difference between agility and flexibility is whether or not the change in market demand has been predicted. Flexibility refers to the capability of rapidly changing from one task to another when changing conditions are defined ahead of time. Agility refers to the ability to respond quickly to unanticipated market-place changes. Fliedner and Vokurka present four, key dimensions of agile competition:
Finally, the two authors prescribe a series of internal and external initiatives for successful implementation of agile manufacturing. The internal initiatives include the following:
External initiatives include:
The authors feel that flexibility provided by agility may emerge as the most important competitive priority of the early twenty-first century, as competition is expected to ensure that manufacturers will increasingly need to adapt readily to market shifts. Ford Motor Company has reportedly invested $350 million in new, agile manufacturing equipment at its Cleveland Engine Plant. A Ford Vice President describes the move as the heart of lean manufacturing.
R. Anthony Inman
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