CIM for the smaller manufacturing company

ALAN PATRICK

Abstract: Computer-integrated manufacturing (CIM) is more a strategy than a set of systems. Unfortunately, much of the theory, systems and advice seems to be aimed at very large companies. This paper shows how medium-sized companies and plants can benefit from CIM without incurring enormous costs. Three main areas are addressed: technology, strategy and financial justification.

Keywords: computer-integrated manufacturing, networking, operating systems, dataflow.

w , hat are the benefits of integration, if any? In the past, systems were often purchased on a 'one- off' basis, to solve particular problems. The

result, after several years, is computers that cannot use the same data and machine tools using different program- ming languages, devices operating different protocols, etc.

The delay of data translation, and repetition of the same data (or rather, the holding of many sets of conflicting data) must add a large cost overhead to any business. In most organizations, repeating, searching for and transforming information can take up a major proportion of work time.

In an environment where business success will depend increasingly on quality, service, choice and delivery it is possible to argue that effective use and control of information, rather than high capital investment in plant, will be the key need of the manufacturing company. This implies the systematic integration of information handling systems.

CIM is usually thought of as encompassing the engineering and manufacturing function only. This is misleading, since a business consists of other functions such as sales, finance, purchasing, etc. All generate and use information, and all determine the overall effectiveness of the business. Failure to take this into account often means that the engineering systems will not integrate with the business systems. However, not all information should be stored, or generated, electronic- ally. The greater the complexity of the system, the more

Manager of Manufacturing Systems Group, NCR Ltd, 206 Marylebon¢ Rd. London NWI 6LY, UK

chances of error, and the greater the possibility of diminishing returns. There will be an appropriate level of complexity for any given system.

A corollary to this is that any system should be hierarchical, where information relevant to one sector is kept and processed on location, and only relevant information is passed to other sectors - reducing the dataflow (complexity) but requiring data indexing and logging. Electronic systems are more appropriate for these tasks than manual. It is important to ensure that dataflow encompasses the needed elements, and not the 'wish list', to comply with the 80-20 rule, i.e. 20 ~o of the effort will yield 80% of the results.

S y s t e m s f o r smaller companies

The following factors contribute to smaller companies being able to use integration effectively:

• Price/performance of computers - Systems are getting more powerful, at lower cost.

• Standard operating systems - Standards such as MS/DOS and Unix mean that a wide choice of applications are available to run on these systems, as well as machines optimized for different tasks being available.

• Networking - Using open system interconnect (OSI) standards, network protocols are available that allow many different systems access to different networks using the same basic structure.

• A greater pool of skilled personnel becomes available as a result of the above two points than would occur with specific manufacturers' systems.

• Systems are becoming more robust and 'user friendly', requiring less expertise to operate on a day-to-day level.

Technology

In the CIM arena, it often seems that open standards interconnection (OSI) networks and manufacturing automation protocol (MAP) are synonymous. This is not the case. MAP uses protocols defined by OSI 8802/4, a token passing bus network topology. This has the advantage because it is deterministic, i.e. the system

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response is highly predictable. This is of special use for control equipment on the shopfloor, where precise timing of repetitive events is essential.

MAP has three major disadvantages:

• At present, it is based on broadband cable which is costly, especially if production areas are widely distributed.

• As a network, MAP is expensive to implement since a fair amount of system intelligence is required to run the network.

• To ensure running costs per metre are minimized all applications are run on a single MAP/broadband 'spine'. This can lead to inflexibility and high overheads.

Figure 1 shows a typical MAP type network. Less attention seems to be paid to the other main OSI

standards for system networking, OSI 8802/3 and OSI 8802/5. OSI 8802/3 is the carrier sense multiple access/collision detect (CSMA/CD). This uses the much cheaper baseband type cabling and allows many protocols to run on it. It is a probabilistic network, therefore it is significantly cheaper to run. Many protocols use this standard, often known as Ethernet.

Technical office protocol (TOP) is an implementation of this standard.

OSI 8802/5 is the token ring. This is a token pass- ing network using ring topology on baseband cable. Token ring has most of the advantages of MAP, being deterministic, but is much cheaper to implement and run since it is baseband. Throughput is about 4 Megabit/sec which is lower than 8802/3 or 8802/4.

It is possible to combine the properties of these two networks to define a system with all the major advantages of MAP but which neutralizes the disadvantages, principally cost.

Using an CSMA-CD/token ring combination, a topology such as Figure 2 is possible. In this, token ring networks are used wherever deterministic systems are appropriate, e.g. shopfloor flexible cells. Using a gateway computer, relevant data is passed via CSMA/CD between cells. In a wide area environment, CSMA/CD and token ring networks are connected via X.25 protocols.

This topology provides token passing only when appropriate, using the lower cost token ring. All cabling is baseband, making it much cheaper. Many protocols run over baseband, e.g. Ethernet, NCR Towernet, TCP/IP, TO P etc., giving a wide range of choices. The use of local

156 Computer-Integrated Manufacturing Systems

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area 'cells' using the main networks only when requiring data from other areas has a significant advantage over MAP (where all data is transmitted on the broadband cable) since it allows networks to be structured hierarchically.

Network hierarchies

Four hierarchical levels in a plant network may be defined,

Level 1

Level 2

Level 3

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Sensors and PLC devices, individual applica- tion systems. Cell controllers, holding necessary information at a local level. Departmental controllers, passing data to and from the cells. These serve as large file servers, and gateways. Plant controllers, accessing data from many departments, communicating with outside devices and corporate hosts.

Figure 3 shows a diagrammatical representation of the hierarchical concepts. It can be seen from this that only levels 1 and 2 need to be on deterministic transmission protocols, the others can use probabilistic protocols. This is because data type will differ principally in levels 1 and 2 as compared to 3 and 4.

Dataflow

It can be argued that the information flow in a manufacturing organization is more important than material flow, especially in a complex manufacturing environment. For instance, most of the techniques which improve the material flow on a shpfloor do so by

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enhancing dataflow and manipulation. For example, the kanban system of 'pulling' material through a factory in fact works by simplifying the information flow (kanban cards) with corresponding improvements in material flow.

Data in a manufacturing organization comes from many sources, for example:

• Shopfloor - event-related data, attributed to order numbers and part numbers

• Design - geometrical data, attributed to drawings and part numbers

• Sales and purchasing mainly textual data, attributed to order numbers and part numbers

• Administration - textual data

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All these different data forms require different data handling, manipulation and storage systems. For example, geometric data held in a CAD database cannot be easily stored or manipulated by an indexed-sequential style MRP database.

It is for this reason that there will probably be many databases in any integrated system. It is important to ensure that all databases are readily accessible. This is simplified by using standard communications protocols and standard operating systems (Unix, MS/DOS) wherever possible.

In an hierarchical network, databases can be structured on a 'need to know' basis. In any application cell, most of the data held will only be useful to the components of the cell. There will be a need to access data from other areas, and transfer data to other areas, but this will only form a proportion of the total data needed. For example, it is not necessary for a production control system to access a geometrical CAD database entirely. It is enough to access a file of scalar properties of the geometry tagged to some common key such as part number or drawing number.

Computer operating systems

It is probable that any company will use a number of manufacturer's systems. Commitment to OSI standards is necessary to ensure that any system can integrate onto a network. Commitment to a common operating system is cost effective.

One reason for this is the learning curve whereby common systems are easier to maintain, train for and develop.

Investment is another reason. By adhering to common operating systems, applications can be transferred between machines. This ensures flexibility and enhances appropriateness.

A third reason is choice. A greater choice of hardware and software is available for a common operating system, especially over an integrated environment.

There are two options to ensure that operating systems are common. The first is to use only one specific manufacturer's equipment. The second is to use industry standard operating systems such as Unix and MS/DOS.

It is unlikely that any one manufacturer will satisfy all the requirements of an integrated system appropriately so the first option is not really possible. Therefore, for any integrated system it is essential to use industry standard systems wherever possible. In fact Unix lends itself well to the integrated environment due to its inherent flexibility, both as an operating system and as a communication medium from one hardware platform to another.

Strategy

In any manufacturing company, a number of procedures and technologies will require integration. Deciding what to integrate, and how and when, requires a planned strategy. A strategy is also necessary, since it will take place over an extended period of time, probably in a three

to five year period. Furthermore, the life of any one piece of equipment will probably be less than that of the overall CIM system.

The main requirements for companies will be to mini- mize outlay and maximize investment protection. Net- working is one way to achieve this. By using OSI systems at all levels, and wherever possible, investment is protected. Also, by using a CSMA/CD topology, with token ring cells, costs are held down compared to MAP. If MAP costs decrease, it can be added to the system. In networking the topology is cellular, allowing modules to be added where needed.

Minimizing investment in hardware can be achieved by standardizing on open standards, especially Unix. Investment in software is also protected. Costs are limited, since learning curves and staff costs are minimized. Choice of hardware is expanded, since many manufacturers use the same operating systems. Investment in software is protected, particularly for company specific modifications.

No manufacturer can supply all equipment, but by adhering to open standards, the potential of integration is far higher. NCR, for example, can supply CSMA/CD, token ring and token bus networking, as well as systems to link into the SNA environment. This ensures that systems can integrate into a multisystem environment. By supplying Unix-based Tower machinery ranging from 1 to 500 users, it is possible to design appropriate cells for most applications, using the same equipment.

As well as supplying the equipment, it is crucial that vendors must be able to advise and support their own systems, especially in the long-term since a CIM system is a business strategy, not a collection of hardware platforms.

Evaluating elements of CIM strategy In order to define a strategy, it is the author's experi- ence that a 'black box' method is useful. In this, individual operational functions are treated as black boxes. The information inputs and outputs may then be analysed. This is useful since it forces definition by function, not by company hierarchy or history. This cross department view is necessary in an integrated environment. Also, analysing inputs and outputs leaves the question of the internal process open, thus avoiding the trap of attempting to computerize present work methods.

Thus it is possible to build up an accurate model of the necessary information flow in the organization. The various inputs and outputs can be classified by their information type (geometric, text, etc.). Having ascertained the type of functions each black box represents, and the data formats, the selection of appropriate technologies is made simpler. Black boxes are roughly synonymous with level 2 cells. Thus this process essentially determines the technologies used in the cells.

The grouping of similar function by data type determines the type and topology of level 3 and 4 departmental and plant level controllers. This process has

158 Computer-Integrated Manufacturing Systems

three important corollaries. First, it often exposes the irregularities of a company organization structure, forcing re-examination of the hierarchy. Second, cells may have more than one data type required or emitted. (For example, a design cell uses geometric item masters, project plans and sales orders as inputs). Third, departmental level controllers control logical depart- ments, i.e. of a similar data type, not physical departments. For example, the production control department partly encompasses the sales, purchasing, planning, scheduling and shopfloor departments in a company.

Using the flexible topologies proposed under section 2, however, the company can be confident that the system can expand or change both flexibly and at low cost. Also, due to the system's open nature, it can accommodate technological change easily as it is cellular (modular) in nature.

Having analysed the information system, the major problem is implementation, i.e. selection, justification, installation and measurement of systems.

Implementation

It has already been noted that the strategy must be top- down. Implementation, however, must be bottom-up. In other words, each project should be:

• cost justifiable as a standalone option • capable of delivering short-term benefits • measurable

This is due to the methods of accounting used in most companies. The advantage of applying these tests to each project is that they can be measured against each other, i.e. a form of capital budgeting of projects. This is especially important for smaller companies, where capital outlay is likely to be a significant percentage of turnover.

Since all projects form part of a top-down planned strategy, they can be implemented independently with the confidence that this bottom-up implementation will lead to an integrated system. Benefits may therefore be gained in both the short and medium terms.

Looking at a business with the black box approach, it becomes obvious that it has only one objective to make a profit. To an extent departments, cost centres, inventory policies, product contribution to cost and so on are conventions, and must be discarded when no longer useful.

Goldratt, Eliyahu and Cox 1 use three definitions in their book. Throughput is the rate at which the system generates money through sales. Inventory is the money invested in the system in purchasing things it intends to sell. Operatin9 expense is the money spent by the system to turn inventory into throughput. By introducing the concept of overall system performance, these definitions are useful in the integrated environment, since they allow for justification and measurement across departments, on a 'company' basis.

Justification

According to the above definitions, the system becomes more profitable by increasing throughput and decreasing inventory and operational expenses. Throughput is improved by sales, not production. In the next five years, factors influencing sales are likely to be combinations of service, delivery, quality, choice and innovation. To increase throughput, resources should be channelled into areas that increase competitiveness, i.e. the differentia- tions or 'centres of excellence' that make a product unique.

Decreasing inventory and operational expenses rely 2 on either a change in capacity use or a change in efficiency. Changing capacity use is a function of removing hindrances or bottlenecks to material flow, or investment in extra capacity. Changing efficiency can be argued to be the removing of bottlenecks to the information flow since efficiency is usually concerned with effective use of existing capacity. For example, MRP, JIT, OPT etc. do not so much change capacity as improve the flow of decision-making information.

For cost justification of integrated systems, this is a useful concept, since the benefits of a system can be measured by their effects on throughput as well as capacity, and by the contribution to information flow. The integrated system will outlast the generations of equipment, therefore it is possible to calculate the system benefits as a whole.

It is easiest to quantify the effects of integration on the limiting factors centres of excellence and bottlenecks. By concentrating on these areas, a strong argument can be made. As each bottleneck is resolved, the 'next worse' case will appear.

Just as the benefits of the integrated system can be calculated across the business, these same approaches make it easier to calculate the low costs of present systems. For example, the true cost of a poor quality product is not just inventory and operational expense contribution, but cost of rework, lost sales, marketing effort and time tied up dealing with irritated customers. This will put the relative cost of a proposed integrated strategy in a much clearer light.

By analysing each component of a strategy by its contribution to throughput, capacity use and efficiency change at bottleneck (i.e. quantifiable) areas, it is possible to calculate the return on investment (ROI) of that project. A 'league table' of ROIs can be drawn up, which will be a guide to which projects should be tackled, in what order and which could be dropped. David Waldron 3 notes that the critical test is to judge a proposal by its return per factory hour. This he defines as:

Return

throughput - inventory operating expense/hour bottleneck hours bottleneck hours

Thus, any project can be measured by its effect on all areas, business wide. This is a better measure than traditional ROI.

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It is possible to further refine the above technique by taking account of the weighting of each project to find a weighted ROI index. For example, improved quality may be a highly weighted objective. Thus any contributing component of a strategy will be affected by the weight and even though the ROI may be lower than other projects, the net index will bring it to the top of the table, compared to a project of the higher ROI but lower weight. This will ensure that all projects will deliver short-term benefit as well as be appropriate to the company.

Measurement

So far, the following has occurred. A CIM strategy has been defined by operation and activity level, and has been weighted. This strategy is a long-range, sequential strategy. The various components of this strategy have been justified against their contribution to throughput, efficiency and capacity use, giving a league table of expected ROIs. However, this has been done with a business wide emphasis on effects. By taking into account the weightings of the affected areas, each component project is ensured to have its total effect across operations indexed, to give a true weighted ROI. Therefore, measurement is much simplified, since the critical areas have been defined, namely:

• what is to be done and what is affected, • in what order and what timescale, • the expected effects on throughput and operations.

Defining a critical path for project management, milestones and performance against expected, is thus possible.

Conclusions

For smaller companies, an integrated approach will bring benefits. These will be greater if CSMA/CD and token ring technologies are used in preference to token bus, due to costs and flexibility. Open operating systems, especially Unix, should be used wherever possible.

Systems should be designed in a cellular fashion using hierarchical dataflow - this ensures protection of investment.

By analysing the dataflow in a company, and defining and weighting the areas of application, an effective long- term CIM strategy is defined. Thus, each project can be undertaken in the knowledge that the system will integrate. This is the technique of top-down, bottom-up implementation.

Finally, by defining benefits on a company-wide basis and calculating existing costs on this basis, a sounder analysis of returns can be made. By analysing each project and taking weighting into account, an appropriate implementation plan can be defined and measured.

References

1 Goidratt, E and Cox, J The Goal (Beating the Competition) Scheduling Technology Group Ltd, UK (1987) pp 59~1

2 Van Loggerenberg, B J and Cuechioro, S J 'Productivity measurement and the bottom line' National Productivity Review (Winter 1981-1982) pp 87-99

3 Waidron, D 'Accounting for CIM: the new yardsticks' Ind. Computing (February 1988) []

160 Computer-Integrated Manufacturing Systems