Journal qf Manu[acturing Systems Vol. 15/No. 2

1996

Case Study

Applying Kaizen and Automation to Process Reengineering JrJung Lyu, National Cheng Kung University, Tainan, Taiwan

Abstract Kaizen and automation are two different approaches to

improve the performance of manufacturers. Both approach- es have been widely discussed and reported in related liter- ature. This paper proposes a framework to integrate kaizen and automation to reengineer a manufacturing process. A case project shows the procedure of process reengineering. This study concludes that using an animated simulation model is an important step during process redesign. This research also shows that a nearly 50% improvement in labor productivity at the case company is possible with the streamlined manufacturing process.

Keywords: Automation, Simulation, Quafity and Productivity Improvement

Introduction Improving quality and productivity to gain a com-

petitive advantage has always been a major issue for most manufacturing industry leaders. Furthermore, as stated by Giffi et al., "sustained competitiveness can- not be created overnight and will never be reached if manufacturers focus on only some of the elements in the manufacturing equations.'" A manufacturer, therefore, should always try to use advanced manu- facturing technology to adopt better management skills, to "right size" the corporate organization struc- ture, and to consider any other appropriate approach- es to gain a superior return over the long run.

Kaizen and automation--two quite different approaches to improve quality and productivity of manufacturers--have been widely discussed recent- ly? ,3 Both approaches have been applied to numerous industries, and many successful experiences have been reported. Kaizen, meaning (continuous) improvement, is as a key factor in the economic suc- cess of Japanese industries. With "traditional" tech- niques such as quality circles (or small-group activi- ty) and management circles (plan-do-check-act), kaizen may turn a profitless company into a prof- itable one without an enormous investment in equip-

ment. Using automation, on the other hand, is to adopt advanced manufacturing technology so that produc- tivity can be raised dramatically. Many companies have implemented flexible manufacturing cells (FMCs), flexible manufacturing systems (FMSs), or computer-integrated manufacturing (CIM) to link enabling technology with their manufacturing processes. Many studies state that automation is the start of another wave of the Industrial Revolution.

The purpose of this paper is to illustrate how the approaches mentioned above can be merged. An industry project serves as a practical framework to integrate both concepts. Specifically, this research looks at how the kaizen approach and the automation approach can be unified into process reengineering. Using process reengineering means to radically rethink a manufacturing process that has existed for many years to reduce costs and improve efficiency and effectiveness? An animated simulation model is also developed to study the performance improve- ment of the case company. The final section of the paper discusses further development of this project.

Company Background The manufacturer studied in this paper is the pipe

shop of China Shipbuilding Corp. (CSBC). The pipe shop was established about 20 years ago and cur- rently does not meet the shipyard's minimum pro- duction requirements. The shop's competitors, on the other hand, can provide a higher pipe production rate at a much lower cost. When CSBC is trans- formed from a nationally owned company into a pri- vately owned, profit-oriented company in the near future, the pipe shop may face the difficulty of sur- vival. Another factor is that, because the shipbuild- ing industry is a so-called 3K (kiken, kitanaei, and kitsui--meaning dirty, dangerous, and hard work, respectively) industry, 5 the pipe shop is also facing the problem of recruiting qualified workers.

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The pipe shop can produce pipes in all size ranges in both ferrous and. nonferrous materials for the shipyard; however, its production rate of 150 pipes per day cannot meet the requirements of the ship- yard, and overtime or subcontracting is necessary, resulting in increases in cost. A flowchart, shown in Figure 1, demonstrates the manufacturing process of the pipe shop. Williams and Oglesby 6 present a more detailed description of the piping design, fabrica- tion, and installation in commercial shipbuilding practices.

There are 67 workers currently in the pipe shop, and the production rate per worker per day is much lower at competitive companies. Among the reasons for the low labor productivity, based on the observa- tions of the managers, are inadequate plant layout

t

Incoming raw pipes I

Cutting

I

I I WeLding

Grinding

I Cleaning/coating [

Bending

Figure 1 Traditional Manufacturing Process of Pipes

and obsolete machines. The pipe shop layout is shown in Figure 2.

From the executive manager's point of view, the situation is clear: Is it possible to increase the pro- duction rate of the pipe shop with a smaller work- force? Two types of approaches--kaizen and automation--were proposed by consultants from Japanese shipyards and Western countries' ship- yards, respectively. The concepts and practices of these two approaches are briefly explained in the following sections.

Automation Approach Automation is one of the most competitive tools

available to manufacturers. A company may take advantage of the new technologies so that its manu- facturing process and operations can outperform those of other companies. The contents of automa- tion technologies involve not only computer-aided design (CAD), computer-aided manufacturing (CAM), robotics, computer numerical control (CNC), and many hardware/software products, but also include concepts and techniques such as design for manufacturing (DFM), value engineering (VE), and group technology (GT). To design and imple- ment new technologies and to build "the factory of the future" is, therefore, not simply the purchasing and installation of some turnkey solutions for the industry. Careful financial justification of the invest- ment and adequate education and training are also required. Latorre and Zeidner 7 review the process of designing and implementing automation technology.

Consultants from American and European ship- yards gave advice regarding the automation of the pipe shop. Some suggestions are as follows:

There are three overhead cranes in the pipe shop, and one of them is always broken down. Because the utilization rate of cranes is very high, the pipe shop apparently should purchase one more crane.

Another bottleneck of the pipe shop is the bend- ing process. Because of the time needed to change the fixtures--up to 1.5 hours for a large bender machine--the suggestion is to improve the pipe marking method during the cutting process. That is, once the raw pipes are cut, a computer-aided marking machine is used to mark the pipes required to be bent in the process. Workers can then classify cut pipes to

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Cleaning and coating zone

Electric transfer car rail

Inspected pipes

Cutting zone

Raw pipes storage area

Bending zone

Joining zone

Overhead cranes

Welding Grinding zone zone

Welding zone

Inspection area

Figure 2 Original Layout of Pipe Shop

reduce the number of fixture changes during the bending process. The capacity of the welding zone is inadequate, and many pipes are waiting to be welded on the shop floor. Automated welding machines should be purchased in the near future.

Consultants from Japan strongly discouraged the managers of CSBC from adopting the automation approach. They felt that the productivity of the pipe shop could be further improved using kaizen. Some examples proposed by the Japanese consultants are as follows:

Kaizen Approach When the kaizen approach is applied to manufac-

turing, it becomes CIM (continuous improvement manufacturing)? CIM utilizes seven tools--Pareto charting, histograms, fishbone techniques, control charting, scatter diagrams, graphs and flowcharts, and check sheets--to execute problem-solving activities in the factory. The basic mechanism of the kaizen approach makes any possible improvements under the PDCA (plan-do-check-act) cycle, stan- dardizes the improvements, and continues for another PDCA cycle. With quality improvement activities, managers and workers are encouraged to use innovation and risk-taking as an opportunity to better meet customers' requirements. Kaizen has been proven useful in various areas, including new product development and safety improvement. A complete discussion regarding kaizen can be found in Imai. 8

Fixtures on many welding machines can be improved by the workers themselves through quality control circle activities, thereby increas- ing the efficiency of the welding zone.

It is well known that outfitting is a very labor- intensive task. Consultants suggested that pipes be classified, based on the so-called outfitting zone of the shop, into different working units after the pipes are cleaned and coated. These pre-outfitting efforts will barely increase pipe handling time but will greatly reduce the out- fitting time.

After some cross-department meetings between the pipe shop and the design division of the ship- yard, consultants suggested that the change in the manufacturing process from "welding pipes after pipes bent" into "bending pipes after pipes welded" is possible and can increase the effi- ciency of the pipe shop.

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Uni f ied F ramework Advice from different approaches sometimes

causes confusion for managers regarding the priori- ty of the actions and the subsequent performance measurement. A unified framework depicted in Figure 3 demonstrates how the kaizen approach and the automation approach are merged for process reengineering to achieve dramatic performance improvement. The framework includes eight stages and a PDCA cycle for continuous improvement efforts. The sequence of activities involved in process reengineering is as follows:

Envision the future of the company. The manag- er must use creative thinking to suggest a new process that can effectively improve the manu- facturing environment. In the case study, a top manager applies group technology to rearrange the pipe shop and proposes an "optimum" pipe shop layout without constraint. Under this pro- posed layout of the pipe shop, the length in each production line is much shorter, and the flow time of the materials is reduced. This draft lay- out has inspired an interest to redesign the man- ufacturing process.

Organize a team and set a goal. A process is a collection of activities or tasks that takes input, adds value to it, and provides output to accom- plish an objective. Most of the process reengi- neering projects require a multifunctional team with members from different departments due to the cross-departmental nature of the processes. In the case study discussed, a team consists of design division managers and pipe shop man- agers. The goal of the team is to study the possi- bility of a 25% increase in production rate and a decrease of five workers in the pipe shop. This project team will review the suggestions from dif- ferent approaches and decide how to implement an improvement program to achieve the goal.

Examine the existing process. It is a common practice to start the redesign of a system by doc- umenting the existing system. This serves as a benchmark for the future system and an impor- tant basis for any improvement projects. It took about two months for the project team to review the existing manufacturing processes. The docu- ments established are included in the final pro- ject report and will not be discussed here.

Envision future of company

I L

Organize team and set goal [

I 1

Examine existing process

Identify process reengineering opportun t es and current capab ty

I J Design new process

Implement new process and modify infrastructure

I Measure performance

Standardize new process

PLAN

DO

CHECK

ACT

Figure 3 Framework for Process Reengineering

Nonetheless, using a flowchart to map the process flow was very useful in analyzing the manufacturing processes. Identify process reengineering opportunities and current capability. To identify possible process reengineering opportunities, managers must have more insights into the processes either from the enabling technologies or from new management techniques. As discussed in the previous sec- tions, studying two approaches for the case com- pany resulted in some suggestions and identified many possible modifications. Some of them are simply small revisions in the existing plant, but

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one of the concepts from the kaizen team result- ed in a dramatic redesign of the manufacturing process. This concept provides an opportunity for performance breakthrough, which project team decides to work on.

Design the newprocess. With input from previous stages, the project team can design a new process. Persons involved in process reengineering should constantly question which processes or tasks could be shut down, reengineered, or improved. In the case study, the project team adopted the idea of "bending pipes after pipes welded" instead of the existing "welding pipes after pipes bent" concept in redesigning the manufacturing processes of the pipe shop. The team members have discussed the new design from different aspects--management (impact of human resource), equipment (feasibility of hardware and software), and facilities (accompanied layout of the new manufacturing process) to refine the new manufacturing process. For example, managers from the design division had calculated the per- centage of pipes that could fit well in the new design process, based on drawings of some exist- ing ships, and convinced every team member that the new concept was feasible.

Implement the newprocess and modify the infra- structure. This stage is regarding the implemen- tation of the new process. Note that the reengi- neered process should be fine-tuned as problems surface before and after installation. There is always a tradeoff in the implementation stage with cost, technology, and other issues. That is why the framework proposed has an iterative nature. During the case study period, the project team found that the animated simulation model, which will be discussed in the following section, is an important tool for effective communication among the team members and for the prediction of possible bottlenecks and expected perfor- mance of the new process.

Measure the performance. Finally, one must determine the level of success of the reengineer- ing project in terms of the goal set in the previ- ous stage. As shown in many reports, an improvement of 50-60% in cost and productivi- ty is a realistic objective. 9 A detailed discussion regarding the performance of the new process is shown in the following section.

Standardize the new process. Before beginning a new process reengineering project, it is neces- sary to standardize the new process if the orga- nization tries to keep the performance as good as expected. Availability of qualified human resources, adequate equipment, and related doc- uments are all important elements in standardiz- ing the new process. In general, educating and training personnel in the new process environ- ment is critical to maintain the same, if not bet- ter, performance.

There are many books and papers that discuss process reengineering. For example, Hammer and Champy ~ and Roberts" are good sources to use to gain a better understanding of how to undertake a radical reinvention of the process. Because the new process is so dramatically different from the original process, it is common practice that top managers may feel that it is too risky to perform such a "revo- lutionary" change. During the interim of the case project, top managers hesitated regarding imple- mentation of the new process, and project team members had difficulties agreeing on the possible performance improvement. With the use of an ani- mated simulation model, the new layout could be justified. The next section discusses the simulation model development.

Simulation Model Simulation is well recognized as a very useful

technique for the design and evaluation of complex manufacturing facilities. !~ As computer hardware technology keeps advancing and more animated simulation software becomes commercially avail- able, several studies have been conducted regarding the visual interactive simulation of a manufacturing system during the past decade.~3,14 These studies, in general, have shown that the inclusion of animation as a simulation tool can enhance the presentation to users and improve the communication between man- agers and system programmers. With the addition of interactive control ability, users can halt the simula- tion experiment at any moment to view the statistics and/or change some parameters; insights into the system's behavior are then understood.

The procedure to develop a visual interactive sim- ulation model, accompanied with the practices in the case project, is shown as follows:

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Define the goal. A good simulation model is one that covers only the system of interest and can provide answers for managers. An accurate def- inition of the goal is always required. The major concern of this project was the estimated pro- duction rate and the necessary number of work- ers on the shop floor for both the existing and new manufacturing process environment. The time to complete the simulation experiments also had to be as short as possible.

Collect and input data. Sufficient and correct data must be available to formulate a simulation model and to execute the computer experiments thereafter. Information such as demands, routing files of the parts, processing time of the parts, moving time from location to location, and so on is usually required. Traditional time and motion studies and statistical analysis were conducted in this project to find the necessary information. Performance data from the new facilities was collected from vendors.

Draw layout andpartflow diagram. For an ani- mated simulation model, it is necessary to draw the layout for the background during the execu- tion of the simulation model. During the project, the size of the pipe shop and the position of each machine were measured. Layouts for the new process and for the existing process of manufac- turing pipes were drawn. A part flow diagram

was also a necessary input of the software to show how the parts move during the manufac- turing process in the plant. Figure 4 shows a revised plant layout input in the computer. Verification and validation. The computer simu- lation model needs to be verified if it is to work as intended and reflect the operation of the real system. An animated simulation model is much easier to verify and validate because users can monitor the results of each activity on the screen. The output generated from the simula- tion model, based on the existing process, pro- vides a benchmark to compare its "reality." Results and analysis. Output, such as the aver- age production rate or the utilization of each workcenter, can easily be found and collected by simulation packages. Users can also experiment with alternative layouts to improve the perfor- mance of the system. The project team used sim- ulation as a communication channel to examine the possible results of using different operating parameters in the job shop.

In this study, Promodel PC version 5.0 is selected as the simulation software package) 5 This package provides an easy input/output interface, dynamic graphics presentation ability, and various analysis tools at an affordable price. The simulation models were built and executed on an IBM-compatible 486

f Cutting room )

lud Isad lull | uuu lr j

@, Storage ~ ~ , BEm~ND2 ~, l OJ WELD2 WELD3 @ " ,

I- 1 I~[i Big pipe Legend Small pipe 1

Medium pipe

Figure 4 Revised Plant Layout Shown in Simulation Model

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PC. Development of a simulation model for the pro- ject, including debug, took less than two weeks; however, it took more than three months to collect and verify the necessary input data.

Results and Analysis Two types of analyses, static and dynamic, were

conducted. Static analysis is well documented in many plant layout textbooks. One can calculate the moving distance of a pipe during the production process. The procedure is simply to put the layout on the table and go through the manufacturing process flowchart and part flow diagram to determine how a pipe is manufactured in the factory and how much moving distance is required. For example, it was found that the moving distance of a large straight pipe could be reduced from 228.5 meters in the existing layout to 136 meters in the new layout. Various similar calculations were done, and they all illustrated that the new layout was promising.

Compared to the static analysis, simulation then is considered dynamic analysis. Most simulation mod- els approach the manufacturing system dynamically so that arrival rates of demand and equipment uti- lization, for example, are all input as dynamic vari- ables. Users examine the state of the simulation model evolving over simulated time, such as watch- ing a conveyor system in a factory.

Assuming the pipe shop operates 8 hours a day and 260 days a year, the output of the experiments on the simulation model depicts that the average pro- duction rate can be increased from 150 pipes daily to 195 pipes daily after the process is redesigned. The number of workers required in the proposed layout can be reduced from 67 to 60 workers. The labor pro- ductivity can therefore increase from 2.24 (150/67) to 3.25 (195/60)--a nearly 50% improvement in pro- ductivity. This dramatic improvement is due in part to the streamlined manufacturing process (kaizen approach) and to the use of some new facilities (automation approach). With the managers' knowl- edge that 10 persons are planning to retire in the next two years, the proposed layout can also reduce the pressure of recruiting workers.

Another important simulation output shows that use of the overhead cranes can be reduced from 96 to 70 times daily in the new manufacturing process environment. This result is consistent with the top manager's ideal plant layout vision. The implication

of this finding is that there is no need to purchase a new overhead crane, although this had been suggest- ed during the automation evaluation.

An interesting observation is that the managers feel that the workers will have more pride and responsibility in the proposed new manufacturing process. That is, after related activities are designed and integrated into each workcenter in the new lay- out, the job of each worker is enriched. Workers are now involved in a larger portion of the manufactur- ing process and should be more motivated to improve their own working environment. Therefore, quality and productivity could be improved due to the human factor.

Because the pipe shop is a division of CSBC, a nationally owned company, all the investments pro- posed were presented to the government for approval, which was granted. Currently, the pipe shop has started the purchasing process.

Conclusions and Future Research Although the automation approach and the kaizen

approach are quite different, this research shows that it is possible to combine both approaches for process reengineering. Based on the empirical results from the pipe shop in the case study, the improvement is dramatic. The following points summarize the infor- mation resulting from this project:

1. Think about the process instead of products and departments.

2. The proposed framework is effective and seems to be general enough to be applied to other types of process redesign.

3. A cross-department team is required, and good communication among team members is neces- sary.

4. Simulation is very important in process reengi- neering.

5. In redesigning a manufacturing process, human factors should be carefully considered.

6. Improvement performance in process reengi- neering can be very dramatic.

As discussed above, use of a simulation technique is important in process reengineering. Although most simulation packages have a much better inter- face compared to that used in the past decade, man- agers and engineers in the case pipe shop felt that

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the design and implementation of a simulation model was too difficult for them. A decision support system for simulation modeling 16 seems to be a rea- sonable solution to this dilemma.

Acknowledgment The author thanks Mr. Ming-Hwa Phae for his

programming efforts and Mr. Nan-Sun Lin for his helpful comments during the research period. The author is also grateful to Southern Illinois University at Carbondale for providing facilities during his sabbatical visit.

References !. C. Giffi, A.V Roth, and G.M. Seal, Competing in World-Class

Manufacturing: America's 21st Century Challenge (Homewood, IL: Irwin, 1990).

2. G. Arndt, "Continuous Improvement in Manufacturing Based on 'Japanese Quality Techniques'," Robotics & Computer-Integrated Manufacturing (v9, n4/5, 1992), pp413-420.

3. K. Hitomi, "Manufacturing Technology in Japan," Journal of Manufacturing Systems (v12, n3, 1994), pp209-215,

4. V. Grover, K.D. Fiedler, and J.T.C. Teng, "Exploring the Success of Information Technology Enabled Business Process Reengineering," IEEE Transactions on Engineering Management (v41, n3, 1994), pp276-284.

5. "Japanese Shipbuilders Invest in Automation," Motor Ship (1990), pp14-16.

6. L.E. Williams Jr. and R.S. Oglesby, "A Survey of Shipboard Piping Design and Fabrication," Marine Technology (v20, n2, 1983), pp 107-149.

7. R. Latorre and L. Zeidner, "Computer-lntegrated Manufacturing: A Perspective," Journal of Ship Production (vl0, n2, 1994), pp99-109.

8. M. Imai, Kaizen: The Key to Japan's Competitive Success (New York: Random House, 1986).

9. G. Hall, J. Rosenthal, and J. Wade, "How to Make Reengineering Really Work," Harvard Business Review (Nov./Dec. 1993), pp I 19-131. 10. M. Hammer and J. Champy, Reengineering the Corporation (New York: Harper Business, 1993). 11. L. Roberts, Process Reengineering (American Society for Quality Control, 1994). 12. ET.S. Chan and A.M. Smith, "Simulation Approach to Assembly Line Modification: A Case Study," Journal of Manufacturing Systems (vl2, n3, 1994), pp239-245. 13. P.C. Bell and R.M. O'Keefe, "Visual Interactive Simulation--History, Recent Development and Major Issues," Simulation (v49, n3, 1987), ppl09-116. 14. M.E, Johnson and J.R Poorte, "A Hierarchical Approach to Computer Animation in Simulation Modeling," Simulation (v50, nl, 1988), pp30-36. 15. C. Harrell, ProModeIPC User Manual, Version 5.0 (PROMODEL, 1991). 16. J. Haddock, N. Seshadri, and V.R. Srivatsan, "A Decision Support System for Simulation Modeling," Journal of Manufacturing Systems (vl0, n6, 1992), pp484-491.

Author's Biography JrJung Lyu is an associate professor in the Department of Industrial

Management Science at National Cheng Kung University (Tainan, Taiwan). He received his bachelor's degree in engineering science and master's degree in industrial management from National Cheng Kung University and his PhD in industrial and management engineering from the University of Iowa. He has participated in many projects supported by the National Science Council (Taiwan), China Shipbuilding Co., Taiwan Power Co., and private companies. He has also published several papers in international journals and written a book entitled Management Information Systems.

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