My grandfather started developing machine tools in the late 70s. He was one of the first exhibiting a CNC machine controlled by a PC at EMO. At that time quality was connected closely with craftsmanship and experience of the worker in front of the machine tool. CNC controlled machines broke with that connection.
Andreas Walbert
Quality was no longer created by the worker. Quality now was created by the programmer. At least in theory. The real part often differed from the programmed ideal and it took again the experience of a skilled worker to apply compensations inline to the process.
First CNC machines were programmed directly on the shop floor. And in some industries, this has been standard until at least recently. However, such a strategy is limiting operating time.
We all know that downtime is something which needs to be avoided as it is drastically reducing efficiency and hence competitiveness in production. During the last decades the logical reaction was to outsource production to suppliers who were forced over the years to reduce their costs tremendously. There are quite some strategies how you can deal with lower prices per parts, let’s have a closer look at some of them:
- Low-cost production
- Spezialisation
- Increase of efficiency
These three ways also define some “Golden Triangle” with cheaper, better, faster in its corners – pick one or two and you are good to go, but three: impossible.
Strategy 1: Low-cost production
You most likely would combine this strategy with some sort of specialization. You pick a certain part range and try to produce it cheaper than your competitors. There are certain ways to achieve that. You most likely will end up using machines fairly specialized for the parts you intend to produce, you decrease your costs of labor by extensively making use of non-skilled workers for loading / unloading your machine tools and auxiliary processes like deburring, testing, assembly. You’d most likely locate your production in countries with a lower income level and/or end up using contract workers which also allow you to increase/decrease your capacity very quick. Some skilled workers are responsible for the process development and optimization. Typically, this strategy is combined with a tight budget for investments, so that sometimes used machine tools are being used and break-down maintenance is the preferred strategy on maintenance side – in order to spend money on maintenance only if mandatory. With such a strategy it is very tough to stay in business in high-income countries against competitors from low-income countries.
Strategy 2: High-end parts and other specializations
Best example for this strategy is the die and mold industry. If we have a look at the structure of this industry for example in Germany, we see that in the last decades mold makers from Eastern Europe started challenging local mold makers. Then mold makers from Portugal started to addressing customers in Germany, delivering molds for very competitive prices.
Later, competition started to build up massively in Asia. Today it is almost impossible to compete with the price level for standard molds coming from these countries if you are a mold maker in Germany or Italy (I am sure similar situations exist in many other markets, too – but I am picking these ones as I was in contact with mold makers in both markets and noticed the similarities and because I was working for a German mold maker who was not able to make the transformation).
Margins suffered heavily, and local mold makers were forced to change strategy in order to stay in business. One possibility is to concentrate on high-end molds or parts respectively. This is being said easily but the consequences are significant, and the investment is also high-end. Not only do you need the right machine park, but you also need highly skilled workers and engineers in order to succeed. Believe it or not, but there are mold makers who take a plastic cup in their hand, and they can tell you where the wall thickness deviates in some microns.
Strategy 3: Highest efficiency
Efficiency is vital today in order to survive in manufacturing. Efficiency has many names and during the last decades there is hardly one brick left in production which hasn’t been turned at least once in order to gain some advantage. In Europe, Japanese methods are very popular. Kaizen for example is a word which should be known to anyone on the shop floor. Many concepts came directly from the Toyota Production System, including JIT which led as a side effect to a dramatic increase of truck traffic on all our roads.
The issue with efficiency is that you will never be finished. You always must reinvent yourself in order to stay ahead of your competitors. Increasing efficiency ideally should be part of your daily briefing and everyone needs to be committed to it (this is by the way how Japanese understand Kaizen).
Such a lean production is highly automated today, ideally you will see a dark factory. In mass production this ideal seems logical. But there are also other business areas which must follow this path. Business areas in which even experts from the industry until recently claimed that the processes cannot be automated: we are coming back to our die and mold example.
The pandemic situation worked as a catalyst. The real issues started a lot earlier. If quality relies on craftsmanship, you need highly skilled workers. Nowadays, it is not only difficult to find such workers with expertise in die and mold. It’s nearly impossible. Hence you need to find a way to free some capacity of your skilled workers so that they can concentrate on the jobs with highest value adding. Same time margins decreased as we already discussed above, and lead time became more and more important for the industry.
I remember I once sold a replacement mold for a customer producing decorated cups for a food company. They were designed for some innovative small “Buletten” (finger food style burger patties). The company booked TV advertisements for millions one year ahead of the product release. You can imagine that the deadline is fixed.
If you have such customers, you need to be sure you can meet the quality requirements within the given deadline. Every rework at the mold will end up in a disaster, not only killing your margin but also the reputation of your company. As a natural result, there are mold makers who started programs to cut down as much as 50 % of their lead time in order to offer a competitive advantage.
Don’t just put a robot there
Many people believe that they simply can put a robot or a cobot in front of a machine tool and they are good to go. Machine is automated, job done. The opposite is true. With that approach, you just end up automating your existing problems. Automation of a machine tool begins long before you put a robot next to it. First you need to make your processes “fit for automation”. And for that you need an overall strategy for the section you want to automate.
There are even some implications – depending on the strategy you choose – which start to influence your venture even before you start building your production hall. I am again using my example from the mold industry. If you have ever visited a traditional workshop producing molds you know exactly what I am talking about and how hard it will be to automate it.
Typically, the machines are not as perfectly aligned as inside the production hall of an Automotive OEM for example. Also, if you want to concentrate on high-end, but you own 20-year-old machine tools and the temperature difference in your hall between night and day is 20° C you first have some other homework to do before you can think about automating your processes.
Small and medium sized companies use their machine tools often only in two shifts, if the owner is still working on the shopfloor by himself, it may even be only one extended shift. With the massive competition they are facing today, this strategy is very exhausting. Putting some robots on the shop floor won’t do the trick right. If you want to gain additional unmanned shifts, you need to analyze all your processes and first make them “fit for automation”.
If you are in this situation right now and you already know that you must automate in order to stay in business, but you don’t know where to start, I invite you to have a look at your situation together and eventually define some next steps together on your way to gaining more efficiency and a higher grade of specialization. Unmanned shifts are possible – also for small and medium sized companies.
In the next episode I will have a closer look at some methodologies of automating machine tools. Let me know in the comments below if you have some specific questions on this topic.