INSIGHT# 2008-07EMD FEBRUARY 14, 2008

Assembly Line Control and Sequencing Make or Buy?

By Ralph Rio

Keywords
CPM, MES, Assembly Line, Broadcast, Control, Sequencing, Automotive, Electronics

Overview
Industry trends and competitive pressures have caused manufacturers to move from Build to Stock (BTS) based on a forecast and towards Assembly to Order (ATO) with Just in Time (JIT) inventory management. However, when using traditional methods, ATO and JIT conflict. With ATO, some will want a large buffer of raw materials and work
Downtime for a continuous assembly line can cost $100k to $1 million per hour. Conflicting objectives of product proliferation, ATO and JIT have broken many material management systems. Writing your own is expensive and a technical challenge. Meanwhile, packaged applications have grown in capability and are worth consideration.

in process (WIP) inventory to meet all possible configurations. JIT demands low raw materials and low WIP. Increased product proliferation and options adds to this conflict. Robust applications with rapid response to exceptions are needed to manage the dynamic environment of a rapidly moving assembly line with its stations. Packaged applications have be-

come available to address assembly line sequencing, broadcast and control. Rather than developing their own custom applications, manufacturers should consider packaged software for next upgrade.

Affect of JIT and ATO on Assembly Lines

In manufacturing, there has been a shift away from BTS based on a marketing forecast. Let's face reality - the people in marketing cannot accurately predict the future. As a result, there is always a difference between what was built and what customers actually buy. Those with assembly lines have additional constraints that compound the problem. Changing the line over for the needed products is expensive and often contrary to the produc-

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tion manager's metrics. The difference between production and actual orders leads to excess inventory, poor on-time delivery and lost orders. Another key issue is changes in the volume and mix (options) of incoming orders which requires the line to be rebalanced. The corresponding line changes permeate and echo through the production systems as work sequence rules and productivity issues are adjusted. These imbalances (forecast vs. orders, volume and mix) have been exacerbated by some recent trends. One is product proliferation. More product variation leads to more items to forecast, with a greater likelihood of being wrong, and more mix variation. In the past, companies attempted to constrain product variation (Henry Ford's "any color as long as it is black"). Today, being competitive and growing the business demands product variety. A second trend is reducing set-up so the line is easier to change-over.
Trend Product proliferation and options Inventory for raw materials Finished Goods inventory Production run size Lead time for setting schedule Direction Increasing Decreasing Elimination Smaller Shorter

This helps manufacturers move to ATO and eliminate finished goods inventory. A third trend is JIT inventory management. In the past, inventory of raw materials would buffer the errors in the forecast and provide the materials needed to make the products that were actually purchased. Today, it is impractical for companies to have enough inventory to provide for every potential product variation.

Trends Driving Advanced Assembly Line Sequencing, Broadcast, and Control

These recent trends along with the adoption of ATO and JIT are driving the development of advanced software applications that can manage the complexity and provide the needed fast response to exceptions.
Assembly Line Sequencing, Broadcast, and Control

In this Insight, examples for automotive assembly will be used. The concepts can be applied to most continuous assembly lines. Today, most cars are assembled for a particular dealer order. On the surface, this may sound simple, but execution gets complicated fast. Ever wonder how the assembly system makes sure the red bumper gets on the matching red car? And, the white side view mirrors get on the white cars? Now, extend this to the particular configuration of options (audio systems, seat covers, etc.) that the dealer ordered all while producing at the speed of about a car a minute. Hundreds of subassemblies and components must

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get to the production line at the right time and in the right sequence. Meanwhile, the sequence may change due to an exception that occurs while the cars are moving down the assembly line. Controlling the flow of materials is non-trivial to say the least. Sophisticated software systems are needed to manage the sequence, routing, quality and exceptions. They provide support in three major areas:

Slots in a Virtual Assembly Line Application: Line Sequencing

The Real Assembly Line Application: Broadcast and Control Component Deliveries Application: Supplier Sequencing

Positioning Three Assembly Line Management Applications

1) Assembly Line Sequencing - The virtual assembly line contains slots where orders are sequenced and queued before the real line. This sequencing uses a set of business rules. An example is like this: cannot have three sunroofs in sequence because the extra time repeated three times will slow the entire line. With more products and options on the line, the rules expand and this becomes a massive, rule-based, linear programming problem. 2) Assembly Line Broadcast and Control - The control part involves routing the product through the assembly line and its branches. Business rules are used to determine the routing in real-time. Control includes error prevention, i.e. insuring that the correct component was picked and placed on the car. If a problem occurs (a machine failure), the change is sent (broadcast) to the other stations so they can adapt (perhaps a change in routing). When a car is taken off the line, this is broadcast so the sequence of components in the remaining stations can be changed consistently with the removal of that car. The broadcast includes sending a message (usually through the production planning system) to the suppliers so they know the sequence of car configurations they will need to support.

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3) Supplier Sequencing - Suppliers take the broadcast, interpret it, and determine the sequence for which they need to deliver their products. The broadcast varies by OEM and plant. If components are delivered late or in the wrong sequence, there is a significant penalty. Interpreting the broadcast correctly and responding appropriately is of critical importance. The Toyota Motor Manufacturing, Kentucky (TMMK) facility in Georgetown, Kentucky provides its suppliers the broadcast 22 hours prior to the slot entering the real line. The supplier's inventory is a maximum of 2 hours of stock at the line which must be replenished every 2 hours. This line produces a car every 54 seconds.
Make vs. Buy

In the past, auto OEMs and manufactures with high product variety wrote their own custom systems to control and manage their production lines. Many companies have multiple plants with each one having their own custom applications tailored to the site's idiosyncrasies. Each site has their own support staff, which consists of a few people intimately knowledgeable with the software and able to support it. As these people go on vacation, or move on, support becomes an issue. The systems are fragile and inflexible. Some companies have started to recognize these issues (just one extended outage tends to get management's attention).
Functional Area Line Sequencing Suppliers GE Fanuc Proficy Tracker Optessa Oracle Flow Manufacturing Module Apriso Flexnet GE Fanuc Proficy Tracker Insequence SPD Pro RedPrairie QAD JIT Sequencing

Rapid changes in technology, thinner operating margins and rising availability of packaged applications are drivers for buying rather than making. Commercial software packages are designed to be flexible to meet the needs of multiple customers. With multiple installations and an infrastructure of support, they are more robust. A few packaged software application suppliers have emerged.

Line Broadcast and Control Supplier Sequencing

Packaged Application Suppliers

An example is the GE Fanuc Proficy Tracker software application. Of approximately 250 automotive assembly lines worldwide, GEFs Proficy Tracker and related products are installed in about 100. Installations are also occurring in assembly plants outside of the automotive industry. In November 2007, Dell published an article stating that it has standardized on Tracker for all of its PC assembly plants worldwide.

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Last Word
Continuous assembly lines are expensive to run and produce significant revenue. An outage will have an impact that ranges from $100,000 to $1 million per hour. Applications age as technology changes and industry business practices improve. If you are converting to ATO and have a prolific product line with many options, packaged software should be considered. If your assembly line sequencing, broadcast and control applications are more than seven years old, they should be examined for replacement. For further information or to provide feedback on this Insight, please contact your account manager or the author at rrio@arcweb.com. ARC Insights are published and copyrighted by ARC Advisory Group. The information is proprietary to ARC and no part of it may be reproduced without prior permission from ARC.

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