Intelligent Manufacturing € February € 1996 € Vol. 2 € No. 2

Continuous Flow Manufacturing

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The current marketplace for manufacturers is dynamic, global and consumer-focused. Shorter product life cycles, reduced profit margins and consumer demands for more variety in products are forcing changes in the way products are manufactured.

According to manufacturing consultant Rap McBurney, while some companies continue designing products and "pushing" these products into markets, many progressive companies are facilitating programs and processes designed to accommodate the paradigm shift from "push" to "pull" manufacturing.

Manufacturers are in various stages of transformation from "push" to "pull" distribution, McBurney explained. "However, more and more companies are focusing on supply chain issues and investing large volumes of labor and money in logistics and distribution systems to meet consumer and financial demands without incorporating manufacturing into the process." Distribution excellence is achieved using the process of continuous flow distribution, which is the streamlined pull of products in response to customer requirements while minimizing the total costs of distribution. This streamlining and continuous flow extend beyond the boundaries of the distribution center or warehouse into the manufacturing process.

"The process of continuous flow manufacturing is an integration of the continuous flow distribution theme with reduced inventories and throughput times within the manufacturing process to support the continuous flow distribution process," observed McBurney, southeast region general manager of Tompkins Associates Inc. (Raleigh, N.C.), a manufacturing consulting organization. Continuous flow manufacturing encompasses four basic elements:

1) Based upon customer requirements, an overall manufacturing network must be configured.

2) Manufacturing requirements are identified, and strategic master plans are developed and implemented for each operation.

3) Information and management systems for the manufacturing process and operations are assessed, defined, purchased and implemented. The information systems will drive the manufacturing continuous flow process and will interface with all of the organization's business systems.

4) Once the manufacturing network, manufacturing requirements, and information and management systems are in place, the process of continuous improvement must be installed.

Supply chain management is really nothing more than logistics driven by the requirements of the 1990s, he noted. What is important is an understanding of the entire chain, which includes purchasing, manufacturing, distribution, information services, customer service, sales, marketing, research and development, maintenance, and more, driven by the needs, desires or requirements of the customer.

He prefers the term demand chain management because "the process should be one of supplying what the customer demands, rather than what we can force down the chain. In this spirit, the manufacturing managers must be brought into the supply chain management strategy to fully understand that the role of manufacturing is to be a part of the distribution process, not a vendor to it."

The old way of improving production, McBurney reminded, was to simply produce more while containing manufacturing costs, using basic industrial engineering principles. This methodology was often expanded into other areas of the organization such as maintenance, warehousing, distribution, labor, sales, information services, and so on. Each area of the organization was given departmental performance goals that require the department to optimize its function. This approach is called channel optimization.

"Channel optimization was (and still is) very effective at reducing individual department costs," McBurney noted. "However, the impact on the other departments in the organization can be quite negative. The costs of manufacturing can be optimized to the detriment of the total organization. In a continuous flow manufacturing environment, on the other hand, manufacturing quantity is based upon factors from the entire organization, rather than solely on the manufacturing costs."

Manufacturing management, he believes, must be brought into the decision cycle so that a total understanding of continuous flow distribution and manufacturing can be understood. This requires a cultural shift from "my department" to "my company" as the focus. This global approach to manufacturing will require that all departments participate in the decision process to determine total costs of distribution.

According to McBurney, to make this happen, a manufacturer must have information and management systems that support the efforts of continuous flow manufacturing. "Only when we have quality information can we become truly intelligent," he noted. "Quality information is more consistently communicated by using computer-based information and management systems to integrate customer requirements, supplier availabilities and strategically planned distribution networks, operations and manufacturing capabilities." This integration will result in improved information quality, reductions of errors, maximization of labor utilization, maximization of equipment utilization, improved customer service and ultimately, market domination.

"Continuous flow manufacturing," he concluded, "is essential for those manufacturers that will compete in the marketplace of the future. The total costs of distribution will be understood and departmental optimization will be eliminated in favor of a 'total cost' approach. Leaders within those manufacturing organizations need to understand, communicate and implement the vision to streamline production and distribution, establish manufacturing networks, implement manufacturing excellence, and use team-based continuous improvement."