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Posts Tagged ‘Manufacturing’

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Custom-made bikes are a very small slice of the US bike market. According to The Atlantic, the vast majority of bikes sold in the US are made in Asia and a handful of companies dominate the market (America’s Rebel Band of Custom-Bike Builders, Apr 3).

Though thriving, the 100 or so builders in the hand-built bicycle scene make up about 3.3 percent of the overall U.S. bike industry, which was valued at $6.1 billion in 2012 and is sourced almost completely overseas, according to bicycle industry expert Jay Townley with the Gluskin-Townley market research firm and a report by the National Bicycle Dealers Association. In 2011, 99 percent of bicycles sold in the U.S. were assembled in Asia—93 percent in China and six percent in Taiwan.

Additionally, just four companies—Dorel Industries, Accell Group, Trek Bicycle Corporation, and Specialized Bicycle Components—own about half of the 140 bicycle brands available in this country, including Schwinn, Cannondale, Raleigh, Gary Fisher, Trek, and Specialized, Townley said.

The article goes on to note that while small, those custom builders are responsible for a lot of the innovation in the industry. Because their work is premised on doing something unique, they are inclined to take more chances than a larger firm. So what does it take for these small guys to be successful?

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What’s the right mix of workers and machines in making cars? According to Bloomberg, Toyota has been re-thinking that question and moving to shift more work back to people (‘Gods’ Make Comeback at Toyota as Humans Steal Jobs From Robots, Apr 7).

Inside Toyota Motor Corp.’s oldest plant, there’s a corner where humans have taken over from robots in thwacking glowing lumps of metal into crankshafts. This is Mitsuru Kawai’s vision of the future.

“We need to become more solid and get back to basics, to sharpen our manual skills and further develop them,” said Kawai, a half century-long company veteran tapped by President Akio Toyoda to promote craftsmanship at Toyota’s plants. “When I was a novice, experienced masters used to be called gods, and they could make anything.”

These gods, or Kami-sama in Japanese, are making a comeback at Toyota, the company that long set the pace for manufacturing prowess in the auto industry and beyond. Toyota’s next step forward is counter-intuitive in an age of automation: Humans are taking the place of machines in plants across Japan so workers can develop new skills and figure out ways to improve production lines and the car-building process.

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I have become increasingly taken with the question of what constitutes a good job. Various parts of operations in many industries have become automated over time and that trend will continue. But firms will still need people. Some production steps will be sufficiently nuanced or require too much dexterity that using a robot is (at least for now) impossible. Other setting like retail will favor resources who can move more or less seamlessly between restocking shelves to checking out customers. So what do these jobs look like? Unfortunately, the answer can be fairly grim.

The Atlantic has an article written by an ex-Politico reporter who lost his job and ended up (mostly out of desperation) working at sporting goods store (My Life as a Retail Worker: Nasty, Brutish, and Poor, Mar 11) and found the experience rather dehumanizing.

Of course, I had no idea what a modern retail job demanded. I didn’t realize the stamina that would be necessary, the extra, unpaid duties that would be tacked on, or the required disregard for one’s own self-esteem. I had landed in an alien environment obsessed with theft, where sitting down is all but forbidden, and loyalty is a one-sided proposition. For a paycheck that barely covered my expenses, I’d relinquish my privacy, making myself subject to constant searches.

“If you go outside or leave the store on your break, me or another manager have to look in your backpack and see the bottom,” Stretch explained. “And winter’s coming—if you’re wearing a hoodie or a big jacket, we’ll just have to pat you down. It’s pretty simple.”

When he outlined that particular requirement, my civil-rights brain—the one that was outraged at New York Mayor Michael Bloomberg’s stop-and-frisk policy and wounded from being stopped by police because of my skin color—was furious. …

I’m not sure why—perhaps out of middle-class disbelief or maybe a reporter’s curiosity—I pressed the issue. Seriously: I have to get searched? Even if I’m just going across the street for a soda, with no more than lint in my pockets? Even if you don’t think I stole anything?

Stretch shrugged, unconcerned. Clearly he’d been living with this one for a while.

“Yeah, it’s pretty simple. Just get me or one of the other managers to pat you down before you leave.” (more…)

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What exactly constitutes manufacturing? There are some settings that are very clear. If you work at an assembly plant building cars, you are in manufacturing. If you work at a university that educates students and produces research, then you ain’t. But there are other situations that are not as clean cut. Check out this example from the Wall Street Journal (U.S. Agencies Consider Redefining Manufacturing, Mar 14).

“If someone asks me at a party, I say we make binoculars,” said the president of Carson Optical Inc., a small company tucked in an industrial park in this New York City suburb, adding, “It’s a little bit more vague than saying we manufacture them.” …

A stroll through Carson Optical shows why companies like these can be hard to label. Mr. Cameron, a former banker, started the firm 23 years ago after a stint working in Asia, where he saw the potential to import optical goods from Japan.

But the firm today has evolved far beyond just importing the things that others create. In a conference room near the front, the walls are lined with products Carson’s three-person engineering team has designed, including a hand-held microscope used by medical-marijuana growers to study their plants and an anti-reflective lens device that can be clamped onto binoculars and gun sights.

Carson holds 94 U.S. and overseas patents. The company closely monitors how its goods are made, in some cases buying materials needed to make them and sending them to the factories in Asia.

And the evolution continues. Mr. Cameron is shopping for his first computer-guided production machine and is preparing to move to a bigger nearby building to accommodate his growing design and development operation. He plans to use the new machine to make better prototypes but doesn’t rule out someday making some of his own goods.

So is this manufacturing? On the one hand, they are not doing the nitty-gritty tasks of molding parts or fastening them together. On the other, they are doing most of the high value work like product design as well as sourcing material and setting quality standards. Carson Optical may fail a Potter Stewart I-know-it-when-I-see-it test, but it is holding onto the parts of modern manufacturing that create meaningful value.

Why does this matter? Because the federal government is reconsidering how to define manufacturing and more specifically wrestling with the likes of Carson Optical. (more…)

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Check out this spiffy graphic from Automotive News on the evolution of auto assembly in Mexico (Japanese automakers march into Mexico, set up export base, Mar 10).

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That expansion has to a large extent come at the expense of the rest of the North American industry as this graph from the Chicago Federal Reserve demonstrates.

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Note that overall assembly capacity has declined. That’s not too surprising. The industry was generally seen as being overcapacitated, and the Big Three took the never-let-a-crisis-go-to-waste route to reduce the number of factories and resize their business. But Mexico clearly gained and it is forecasted to gain even more. Here’s another graph from the Chicago Fed.

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It should be noted that this growth is driven by Japanese brands. GM is the only US or European firm to open a new plant following NAFTA. All the action lately has been due to the likes of Honda, Mazda and Nissan. Given this growth in capacity, it is not too surprising that Mexico is expected to pass Japan this year and Canada next year to become the top source of imported cars in the US. But why has there been such a rush invest there? (more…)

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There has been a lot written recently about the state and future of making stuff in the US. Just in the past month, Strategy & Business has touted new technology and software as a way forward for American manufacturing (America’s Real Manufacturing Advantage, Jan 20) while Steven Rattner, the administration’s former Car Czar, took the New York Times pooh-poohing talk of a revitalized manufacturing base (The Myth of Industrial Rebound, Jan 25). As Rattner sees it, whatever boost there has been in manufacturing has been inconsequential and not beneficial for workers.

But we need to get real about the so-called renaissance, which has in reality been a trickle of jobs, often dependent on huge public subsidies. Most important, in order to compete with China and other low-wage countries, these new jobs offer less in health care, pension and benefits than industrial workers historically received. …

This disturbing trend is particularly pronounced in the automobile industry. When Volkswagen opened a plant in Chattanooga, Tenn., in 2011, the company was hailed for bringing around 2,000 fresh auto jobs to America. Little attention was paid to the fact that the beginning wage for assembly line workers was $14.50 per hour, about half of what traditional, unionized workers employed by General Motors or Ford received.

With benefits added in, those workers cost Volkswagen $27 per hour. Consider, though, that in Germany, the average autoworker earns $67 per hour. In effect, even factoring in future pay increases for the Chattanooga employees, Volkswagen has moved production from a high-wage country (Germany) to a low-wage country (the United States).

This all gets us to a different New York Times on Harley Davidson that describes changes the firm made to save itself (Building a Harley Faster, Jan 28). What is interesting is that Harley’s approach differs fundamentally from either of the approaches above. They are relying on humans over widespread automation and working with their existing, unionized workforce as opposed to hightailing it to a location with cheaper labor. (more…)

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A few weeks ago we had a post on 100th anniversary of Ford’s moving assembly line. Now the New York Times has an article on how the assembly line has evolved at Ford and other automakers (100 Years Down the Line, Oct 29). What stands out is how Ford and others are seeking to manage variety.

Flash forward to today, inside Ford’s five-million-square-foot, ultramodern Michigan Assembly Plant in the city of Wayne. Nearly 5,000 hourly workers staff the plant in three shifts. The assembly line is three miles long and features more than 900 robots. In the last four years, Ford has spent more than $500 million to refurbish the plant, which dates from 1957.

What makes the plant unusual is the variety of vehicles it makes. Its primary product is the Focus, one of the best-selling cars in the world. But the factory does not just build Focuses with traditional gasoline engines. It can also build them in electric and plug-in hybrid versions.

And the company recently added production of the new C-Max Hybrid — a smallish wagon that shares many parts with the Focus but has an entirely different shape and style.

Recently, as Focuses and C-Maxes hummed smoothly along the line behind him, Mr. Fleming, the Ford executive, said that the company was intent on making all its plants as flexible as Michigan Assembly.

“Within the next five years, our plants globally will be able to produce an average of four different models or derivatives of a model,” he said.

So how is Ford able to manage so much variety on one line? (more…)

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Few management innovations have clear starting points but one that does is the assembly line. One hundred years ago today, Ford’s Highland Park Assembly plant began to use an assembly line. Here is how the Ford Motor Company describes things (Game Changer: 100th Anniversary of the Moving Assembly Line):

When Henry Ford began making cars in the early 1900s, “state-of-the-art” manufacturing meant car bodies delivered by horse-drawn carriage, with teams of workers assembling automobiles atop sawhorses. The teams would rotate from one station to another, doing their part to bring the vehicle together. Parts deliveries were timed, but often ran late causing pile-ups of workers vying for space and delays in production. Fortunately for the future of industry, these archaic practices came to an end Oct. 7, 1913. …

On Oct. 7, 1913, Ford’s team rigged a rudimentary final assembly line at the Highland Park Assembly plant. Engineers constructed a crude system along an open space at the plant, complete with a winch and a rope stretched across the floor. On this day, 140 assemblers were stationed along a 150-foot line and they installed parts on the chassis as it was dragged across the floor by the winch. Man hours of final assembly dropped from more than 12 hours under the stationary assembly system to fewer than three. In January 1914, the rope was replaced by an endless chain.

By bringing the work to the men, Ford engineers managed to smooth out differences in work pace. They slowed down the faster employees and forced slower ones to quicken their pace. The results of mass production were immediate and significant. In 1912, Ford Motor Company produced 82,388 Model Ts, and the touring car sold for $600. By 1916, Model T production had risen to 585,388, and the price had dropped to $360.

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The potential of additive manufacturing has been a recurring theme on this blog. There is no denying that 3D printing is an intriguing technology that holds a lot of promise. To date, however, most of its applications have been in low volume settings such as making prototype parts or custom fitting items for medical applications. How do cost fit into that decision? I have yet to see a clear explanation of just how the variable costs of 3D printing stack up. Now the Economist provides at least a partial answer (3D printing scales up, Sep 7).

Additive manufacturing has other limitations. It can be slow—taking several hours to print, say, a body panel for a car. But speed is relative. What may be too slow for a large production run might be fine for a one-off item which would take weeks to make in a machine-shop.

Material costs are also high. Acrylonitrile butadiene styrene, better known as ABS, is the most common 3D-printing material. A mass manufacturer using plastic injection moulding might buy ABS in bulk for about $2 a kilo, but as a bespoke powder or filament for 3D printing it can cost as much as $80 a kilo, says Anthony Vicari of Lux Research, a Boston company that tracks emerging technologies.

In part the price difference is due to higher standards of purity and composition required for 3D printing. But mostly it is because 3D-printer manufacturers require users to buy materials from them and mark up the price, as with the inks for 2D inkjet printers. Mr Vicari thinks this strategy is not sustainable long term as third-party suppliers enter the business. Moreover, some big manufacturers, like GE, are developing bespoke 3D-printing systems which are not dependent on a single supplier of equipment or material.

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Today, a bit of eye candy from International Business Times (China Manufacturing: 10 Things The Chinese Make More Of Than Anyone Else In The World , Aug 2).

things-china-makes (more…)

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