Slides From Manufacturing Class

1/13/2011
TIMELINE OF MAJOR DEVELOPMENTS
1.1 TIMELINE OF MAJOR DEVELOPMENTS [M.K.Starr]
¾ The Beginning
¾ Interchangeable Parts (see IE 305)
¾ Scientific Management (see IE 327)
¾ Sequenced Assembly (see IE 470)
¾ Statistical Quality Control (see IE 323, IE 434, IE 436)
¾ Lean production Systems (see IE 470)
¾ Flexible Production Systems (see IE 470)
¾ Globalization
Gl b li ti (IE 497: Global Manufacturing)
¾ Manufacturing in the U.S.
M.K.Starr, Production and Operations Management, Atomicdogpublishing, 2004

© 2005 E.A. Lehtihet
Where did it all start?

BEGINNING
INTERCHANGEABLE
1780’s The “legend” of Eli
PARTS Whitney
SCIENTIFIC 1900’s F.W. Taylor and

MANAGEMENT Taylorism
SEQUENCED
ASSEMBLY 1912 Henry Ford and
Fordism
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STATISTICAL 1930’s W. Shewhart, Deming

QUALITY and Juran 1940
1940’ss
CONTROL
LEAN PRODUCTION 1970-1990’s Japanese

SYSTEMS Production System
FLEXIBLE 1980-2000’s Growth of

PRODUCTION Computer and Information
SYSTEMS Technology
1990’s - …The death of

GLOBALIZATION distance and the emergence
of low cost manufacturers
When did it all start?

BEGINNING
2500’ BC?
2500’s
ANGLES OF THE 4 CORNERS

NE : 90~ 3’ 2’’
NW: 89~ 59’ 58”
SE: 89~ 56’ 27”
SW: 90~ 0’ 33’’
Source: S.G. Taseos
Source: NCSLI.org © 2005 E.A. Lehtihet
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INTERCHANGEABLE 1780’s The “legend” of Eli

PARTS Whitney
Eli Whitney is still widely believed in many places and by

many people to be the “inventor”
inventor in 1798, of the concept of
interchangeable parts in manufacturing and assembly when
he proposed to build 10,000 stands of arms under contract to
Eli Whitney (1765-1825) the US Treasury. Considerable historical evidence exists
Source: eliwhitney.org
however that he never delivered on the concept and that his
muskets, delivered 10 years late, did not have interchangeable
parts. [see C. Evans and www://uh.edu/engines/epi1252.htm]
C. Evans, Precision Engineering: an Evolutionary View, Cranfield Press, 1989 © 2005 E.A. Lehtihet
INTERCHANGEABLE Thomas Jefferson and the

PARTS musket makers
¾ 1778 Honore Blanc (Frenchman) produces 200 muskets with

interchangeable parts
¾ 1785 Thomas Jefferson meets Blanc, sees a demonstration

and writes to John Jay, American Secretary of Foreign
Aff i “…He
Affairs “ H presentedt d me the
th partst off fifty
fift locks,
l k
taken to pieces and arranged in compartments. I put
several together myself, taking pieces at hazard as they
came to hand, and they fitted in the most perfect
Thomas Jefferson manner.” [Evans, 89]
(1743-1826)
New York Historical Society C. Evans, Precision Engineering: an Evolutionary View, Cranfield Press, 1989
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INTERCHANGEABLE Thomas Jefferson and the

PARTS musket makers
¾ 1786 Blanc has new plant to mass produce muskets for the
French army
¾ 1791 Committee of scientists including Laplace and Coulomb

examine
i a batch
b t h off 1500 locks
l k andd reportt th
they are
indeed interchangeable
¾ 1801 Blanc claimed to be producing the entire musket with

interchangeable parts
Thomas Jefferson
(1743-1826)
SCIENTIFIC 1900’s F.W. Taylor and

MANAGEMENT Taylorism
http://www.netmba.com/mgmt/scientific/
¾ Scientific investigation of each work element

¾ Science in the selection, training and development of the
workforce
¾ Management/worker cooperation according to scientifically
devised procedures
¾ Hierarchical organization
g with strict division of tasks
between labor and management
9 Tremendous gains in productivity due to time and motion
studies
9 Accused of dehumanizing the worker in search of efficiency
Refer to IE 327: Introduction to Work Design, for concepts in lob analysis and work
measurement
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SEQUENCED
ASSEMBLY
Henry Ford (1863-1947)

www.autolife.umd.umich.edu
¾Interchangeability, division of labor

and flow synchronization combine to
produce the first sequenced assembly
line in 1913
www.eyewitnesstohistory.com
TIMELINE OF MAJOR DEVELOPMENTS / GLOBALIZATION
LEARNING ABOUT MANUFACTURING PRINCIPLES

CAN GIVE YOU A COMPETITIVE ADVANTAGE IN
OTHER FIELDS SUCH AS SERVICE …
PRINCIPLES and INDIA US

METRICS
ECONOMIES OF ¾ 2000 beds ¾ 160 beds average

SCALE ¾ 3,124 surgeries/year ¾ 1,367 @ Cleveland Clinic
¾ 2,777 pediatric patients ¾ 1,026 @ Boston Children ‘s H.
VOLUME LOWERS ¾ $ 2,000 average ¾ $ 20,000 - $ 100,000

COST
MORTALITY RATE ¾ 1.4% W/T 30 days of ¾ 1.9% average

bypass
PROFIT ¾ 7.7% ¾ 6.9%
COMPETITIVE ¾ Plan for Cayman Island H. ¾ Struggling to control cost

ADVANTAGE ¾ Specialization: 4,000 ¾ most surgeons will not approach
complex pediatric surgeries this number in a lifetime
in a 30 year career by one
surgeon
Source: Wall Street Journal, Nov 22, 2009 © 2005 E.A. Lehtihet
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STATISTICAL
QUALITY
CONTROL
¾ Shewhart introduces statistical control charts at Bell Labs

in 1930
¾ Deming and Juran follow up with the Japanese
¾ The body of tools represented by SQC and the total
implementation by the Japanese industry changes the
“social organization of the factory” [P.F.Drucker]
¾ Japanese competition and quality forces US industry to
W.A. Shewhart rediscover SQC
(1891-1967) See Peter F. Drucker, The Emerging Theory of Manufacturing, Harvard
Source: Unknown Business Review, May-June 1990
STATISTICAL
QUALITY
CONTROL
For this topic,

topic refer to
IE 323: Statistical Methods in Industrial Engineering

IE 434: Statistical Quality Control
IE 436: Six Sigma Methodology
W.A. Shewhart
(1891-1967)
Source: Unknown
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LEAN PRODUCTION 1970-1990’s Japanese

SYSTEMS P d ti System
Production S t
¾ Pioneered by the Japanese automobile

companies
¾ Systematic attack on factory waste
¾ Uses a bunch of tools and techniques such as

V l St
Value Stream M
Mapping,
i Process
P Mapping,
M i
Pull Manufacturing etc.
¾ Concept has also spread to the service

Value Stream mapping: Visualization tool industry
that helps to Understand and streamline
work processes Refer to IE 470: Manufacturing System Design and Analysis
http://www.nytimes.com/2010/07/11/business/11seattle.html
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FLEXIBLE 1980-2000’s Growth of

PRODUCTION Computer and Information
SYSTEMS Technology
www.autolife.umd.umich.edu Source: unknown

Ford new assembly plant 2004
Ford model T in the 1920’s
¾ Changeover in days instead of months
“The customer can have any
¾ Handles 9 models off 3 platforms
color as long as it is black.”
¾ Quick reaction to shifting customer tastes
1990’s - …The death of

GLOBALIZATION distance and the emergence
of low cost manufacturers
“ … emergence of a global society in which … events in one part of the world quickly
come to have significance for people in other parts of the world…. The result of
advances in communication, transportation and information technologies. The most
dramatic evidence off globalization
g z is the increase in trade and the movement off
capital. “ ( W.K. Tabb, 2003 )
¾ PROLIFERATION OF FREE TRADE AGREEMENTS
¾ EMERGENCE OF THE E.C. BLOCK
¾ EMERGENCE OF CHINA © 2005 E.A. Lehtihet
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advances in communication
38
40
35
30
Years From
25
Inception to 16
20 13
50 Million
15
Users 4
10
5
0
Radio Personal Televsion World Wide Web
Computers
Radio Personal Computers Televsion World Wide Web
Source: Global Policy Forum

advances in communication
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advances in computer hardware
Source: S. Feldman, IBM, SMEAL Presentation, 2003 © 2005 E.A. Lehtihet
advances in storage technology
Source: S. Feldman, IBM, SMEAL Presentation, 2003

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advances in storage technology
ASSEMBLY DRAWING
Courtesy IE 305 Student Project
advances in transportation
CHICAGO
MALAYSIA
LOS ANGELES
9,000 miles, 16 days 2,000 miles, 6 days

MALAYSIA LOS ANGELES CHICAGO CINCINNATI
SHIP TRAIN TRUCK
22 days, 500 miles / day, $ < 1st class air fare

source of data: M. Levinson, The Box, Princeton University Press
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advances in transportation
TYPICAL CARGO
3,000 40 ft CONTAINERS
10 000 ttons off shoes,
10,000 h clothes
l th
and electronics
TYPICAL CREW
20 PEOPLE
TRIP LENGTH
GERMANY
3 WEEKS
HONG KONG source of data: M. Levinson, The Box,

Princeton University Press
advances in transportation,
Communications, computers
STATE COLLEGE
CHINA IBM THINKPAD

1.6 GHz
768 MB RAM
60 GB HARD DRIVE
CD/DVD R-W
TELEPHONE ORDER : STATE COLLEGE

SHIPPED UPS AIR FROM CHINA
DELIVERED BY TRUCK TO OUR
DOOR STEP IN LESS THAN 4 DAYS
TOTAL COST: $ 750
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PROLIFERATION OF TRADE AGREEMENTS
200
150
100
50
0
1948
1951
1954
1957
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
Num ber of RTA's
Total Value of World Exports : Relative Measure (1990 = 100)
Source: Global Policy Forum © 2005 E.A. Lehtihet
increase in the movement of MANUFACTURING capital towards

worldwide locations for a number of reasons such as:
¾ LOW WAGES AND OBLIGATIONS SUCH AS PENSIONS AND HEALTH
¾ FINANCING, SUBSIDIES AND LOAN GUARANTIES
¾ WORKFORCE EDUCATION AND INFRASTRUCTURE SUPPORT
¾ LOWER TAXATION AND REGULATIONS
¾ CLOSENESS
C OS SS TO
O THE MARKETS
A S WHERE THE GOO
GOODS
S ARE
A SOLD
SO
¾ LOWER EXPOSURE TO SHIFTING EXCHANGE RATES
¾ EASING OF TRADE FRICTION
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1/13/2011

FOREIGN CAR MANUFACTURING IN THE US
¾ BMW
¾ HONDA
¾ HYUNDAI
¾ KIA
¾ MERCEDES
¾ NISSAN
BMW X6 Assembly in Spartanburg, S.C. ¾ TOYOTA
¾ CLOSENESS TO THE MARKETS WHERE THE GOODS ARE SOLD
¾ LOWER EXPOSURE TO SHIFTING EXCHANGE RATES
¾ EASING OF TRADE FRICTION © 2005 E.A. Lehtihet

LOWER WAGES
AVERAGE MFG HOURLY LABOR RATES (2003)

U.S. Labor Dept, Federal Reserve Bank of Dallas ( 2003 )
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worldwide locations for a number of reasons such as: LOWER WAGES
90
80
70
60
50
40 US $ b
30
20
10
0
1991 1992 1996 1997 2001 2002
Foreign Direct Investment in China

Source: The US-China Business Council

¾ FINANCING, SUBSIDIES AND LOAN GUARANTIES
¾ WORKFORCE EDUCATION AND INFRASTRUCTURE SUPPORT
¾ LOWER TAXATION AND REGULATIONS
Intel®300 mm wafer with 45 nm

shuttle test chips. Intel.com
Intel Leixlip, Ireland © 2005 E.A. Lehtihet
15
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THE EUROPEAN COMMUNITY
27 COUNTRIES
¾ POPULATION : 492 MILLION
¾ GDP : 10 TRILLION EUROS (2008)
EFFECTS:
¾ REGULATORY WEIGHT
¾ INDUSTRIAL POLICY
¾ TECHNOLOGICAL COMPETITION
GLOBAL MANUFACTURING GEOGRAPHY: EUROPE_The EC
600
¾ INDUSTRIAL POLICY
500
AIRBUS
ARIANE SPACE 400
GALILEO
300 Airbus
SEABUS 200
Boeing
PHARMACEUTICALS
TRANSPORTATION (RAIL) 100
0
2,000 2,001 2,002 2,003 2,004 2,005 2,006 2,007 2,008 2,009
BOEING /AIRBUS AIRPLANE DELIVERIES

16
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THE AIRBUS DECENTRALIZED SYSTEM OF MANUFACTURE

BUXTEHUDE
BROUGHTON
HAMBURG Cabin, Cargo custom.
Wing
Cabin, Cargo customization
Electrics STADE
Forward & Aft Fuselage Vertical Tail Plane
FILTON NORDENHAM
Electrics, Wing Forward, Aft Fuselage
BREMEN
Cabin, Cargo custom.
NANTES, SAINT NAZAIRE
Forward, Aft Fuselage
Nose, Centre Fuselage MEAULTE
Nose, Centre Fuselage VAREL
Forward, Aft Fuselage
TOULOUSE
Cabin, Cargo, Electrics
PUERTO REAL Nose, Center Fuselage
Horizontal Tail GETAFE, ILLESCAS Wing, Final Assembly
Rear Fuselage Horizontal Tail
Belly Fairing Rear Fuselage
Belly Fairing © 2005 E.A. Lehtihet
Source: airbus
LET US WATCH AN AIRBUS A380 ASSEMBLY
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IME 597: Global Manufacturing
STRATEGIC MANUFACTURING RESPONSES
80000
70000 Airbus workforce
60000
Boeing workforce
50000
40000
30000
20000
10000
0
2001 2006
SHEDDING OF PHYSICAL ASSETS: AEROSPACE
BOEING 35%
JAPAN 35%
Photo Source: Boeing.com
Alenia / Vought 26%
OTHERS 4%
BOEING 787 MANUFACTURING
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Leading edge Wing box Center wing box

Trailing edge USA Japan Japan
Japan Spirit AeroSystems Fuselage, Wheel well
Mitsubishi Fuji
Kawasaki Japan
Kawasaki
Passenger doors
P d
Trailing edge
France
Australia
Latecoere Forward Fuselage
Hawker
USA
Sprint AeroSystems
Vertical tail
USA
Boeing Frederickson Landing gear
France
Horizontal stabilizer Messier-Dowty
ITALY / USA Engines
Alenia / Vought USA / UK
Wing-to-body
Wi t b d ffairing
ii GE / Rolls
Rolls-Royce
Royce
Canada
Center fuselage Boeing Winnipeg
Aft fuselage Nacelles
ITALY / USA Wing tips USA
Alenia / Vought Korea Goodrich
Korean Air
Source: Forbes Magazine, April 17, 2006

Cargo / access doors Engine pylons
Sweden USA
Saab Spirit AeroSystems © 2006 E.A. Lehtihet
MANUFACTURING IN THE U.S.
¾ GROWS THE ECONOMY (Popkin

(Popkin, 2003)
1.6
Generated Per Dollar
1.4 Final Sales($)
1.2
Other Economic
1 Activity($)
0.8
Output G
0.6
0.4
0.2
0
Mfg All Sectors Service
O
U
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¾ INVENTS THE FUTURE (NAM

(NAM, 2004)
80
Share of GDP (%)
70
60 Share of R&D
Performance(%)
50
40
30
20
10
0
Manufacturing Non-manufacturing
O
U
¾ INCREASES PRODUCTIVITY (NAM,

(NAM 2004)
210
wth Index (1980=100)
190
MANUFACTURING
170
150
Productivity Grow
130
110 NON FARM BUSINESS
O90
U 1980 1984 1988 1992 1996 2000
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¾ REWARDING EMPLOYMENT (NAM, 2004)
60,000
Compensation in 2001 (for a full-time worker)
50,000
Other Compensation
40,000
Wages
30,000
20,000
10,000
0
Manufacturing Rest of
O Workforce
U
¾ COMPETES GLOBALLY (NAM, 2004)
Manufacturing
35
30
Trade as a % off gross output
25
20
Overall economyy
15
10 Non--manufacturing
Non
5
0
1987 ‘89 ’91 ‘93 ’95 ‘97 ‘99
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Remarks from speech given to Iowa State Students, April 19, 2005
¾ “ However you look at it, globalization is inevitable…affecting the farmer in Story

County as well as the shopkeeper in Shanghai.”
¾ “Today, we ship combines made in East Moline, Illinois to the former Soviet Union,
Chinese combines to the Middle East, Brazilian combines to Europe, and German and
Indian tractors to the US. In fact, to be competitive, we produce a tractor in Augusta,
Georgia that is assembled largely with parts received from 12 other countries! And in
Waterloo, Iowa, one of every four tractors produced at that plant is exported from the
US to any one of more than 110 countries on six continents.”
R.W. Lane
Chairman and CEO ¾ To the students listening “ Your competition is not necessarily the person at the next
Deere & Company desk, but the woman in India or the man in China. We are looking for bright,
imaginative and dedicated talent able to work well with other people, often people not
like themselves
themselves. And we can hunt for those sort of people all over the world.”
world ”
22

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1/13/2011

TIMELINE OF MAJOR DEVELOPMENTS

1.1 TIMELINE OF MAJOR DEVELOPMENTS [M.K.Starr]

M.K.Starr, Production and Operations Management, Atomicdogpublishing, 2004

TIMELINE OF MAJOR DEVELOPMENTS

Where did it all start?

SCIENTIFIC 1900’s F.W. Taylor and

© 2005 E.A. Lehtihet

TIMELINE OF MAJOR DEVELOPMENTS

STATISTICAL 1930’s W. Shewhart, Deming

LEAN PRODUCTION 1970-1990’s Japanese

FLEXIBLE 1980-2000’s Growth of

1990’s - …The death of

© 2005 E.A. Lehtihet

TIMELINE OF MAJOR DEVELOPMENTS

When did it all start?

ANGLES OF THE 4 CORNERS

TIMELINE OF MAJOR DEVELOPMENTS

INTERCHANGEABLE 1780’s The “legend” of Eli

Eli Whitney is still widely believed in many places and by

TIMELINE OF MAJOR DEVELOPMENTS

INTERCHANGEABLE Thomas Jefferson and the

¾ 1778 Honore Blanc (Frenchman) produces 200 muskets with

¾ 1785 Thomas Jefferson meets Blanc, sees a demonstration

© 2005 E.A. Lehtihet

TIMELINE OF MAJOR DEVELOPMENTS

INTERCHANGEABLE Thomas Jefferson and the

¾ 1791 Committee of scientists including Laplace and Coulomb

¾ 1801 Blanc claimed to be producing the entire musket with

TIMELINE OF MAJOR DEVELOPMENTS

SCIENTIFIC 1900’s F.W. Taylor and

¾ Scientific investigation of each work element

© 2005 E.A. Lehtihet

TIMELINE OF MAJOR DEVELOPMENTS

Henry Ford (1863-1947)

¾Interchangeability, division of labor

TIMELINE OF MAJOR DEVELOPMENTS / GLOBALIZATION

LEARNING ABOUT MANUFACTURING PRINCIPLES

PRINCIPLES and INDIA US

ECONOMIES OF ¾ 2000 beds ¾ 160 beds average

VOLUME LOWERS ¾ $ 2,000 average ¾ $ 20,000 - $ 100,000

MORTALITY RATE ¾ 1.4% W/T 30 days of ¾ 1.9% average

PROFIT ¾ 7.7% ¾ 6.9%

COMPETITIVE ¾ Plan for Cayman Island H. ¾ Struggling to control cost

TIMELINE OF MAJOR DEVELOPMENTS

¾ Shewhart introduces statistical control charts at Bell Labs

TIMELINE OF MAJOR DEVELOPMENTS

For this topic,

IE 323: Statistical Methods in Industrial Engineering

TIMELINE OF MAJOR DEVELOPMENTS

LEAN PRODUCTION 1970-1990’s Japanese

¾ Pioneered by the Japanese automobile

¾ Systematic attack on factory waste

¾ Uses a bunch of tools and techniques such as

¾ Concept has also spread to the service

TIMELINE OF MAJOR DEVELOPMENTS / GLOBALIZATION

© 2005 E.A. Lehtihet

TIMELINE OF MAJOR DEVELOPMENTS

FLEXIBLE 1980-2000’s Growth of

www.autolife.umd.umich.edu Source: unknown

TIMELINE OF MAJOR DEVELOPMENTS

1990’s - …The death of

¾ PROLIFERATION OF FREE TRADE AGREEMENTS