Tag: advanced manufacturing

OM in the News: Adidas Automates to Make Shoes Faster

In a production hall as clean as a hospital, pea-size beads of white plastic pour into what looks like a minivan-size Adidas shoe box, complete with 3 white stripes down the side. That’s fitting, because in just a few seconds the machine heats and molds the stuff into soles of Adidas running shoes, with only one worker needed to wedge in pieces of plastic called stability bars. This is Adidas AG’s “Speedfactory,” where the shoemaker aims to prove it can profitably produce footwear in high-cost, developed economies, reports Businessweek (Oct. 9, 2017). By next fall the facility, as large as half a soccer field, will employ 160 people to make 1,500 pairs of shoes a day, or 500,000 annually.

The plant, halfway between Munich and Frankfurt, and a twin opening this fall near Atlanta, will be key to Adidas’s effort to catch industry leader Nike. It replaces manual stitching and gluing with molding and bonding done by machines, churning out running shoes in a day, vs. 2-3 months in China and Vietnam, where components are shuttled among suppliers that produce individual parts. “In the history of sneaker making, this is probably the biggest revolution since manufacturing moved to Asia,” says an industry exec.

The factories take a page from fast-fashion pioneers Zara and H&M, part of an effort by Adidas to more quickly get shoes, soccer jerseys, and other goods from designers’ sketchbooks to store shelves. Adidas says coupling speed with customization will allow it to sell more gear at full price and keep customers from defecting to rivals. Adidas’s rivals are pursuing similar strategies, with Nike investing in a company making electrical adhesion machines that can assemble the upper part of a shoe 20 times faster than a human worker can. New Balance and Under Armour have started 3D-printing parts of the soles of some shoes.

Classroom discussion questions:

  1. Will these Speedfactories replace traditional shoe production in Asia?
  2. Why is this a revolution in the industry?

 

OM in the News: Can the U.S. Bring Back 1/2 the Manufacturing Jobs that Moved Overseas?

Which jobs make sense to reshore from China?

For decades, U.S. companies have been chasing cheap labor offshore and then importing products to sell in the U.S. market. Now, according to Market Watch (March 9, 2017), “Trumponomics, a broader focus on Total Cost of Ownership (TCO) and advanced manufacturing have the potential to end the manufacturing stagnation of the past 30 years and create millions of manufacturing jobs in the U.S.”

Over the past 20 years, the boom in offshoring drove the U.S. goods trade deficit up by $640 billion a year, costing the U.S. 3-4 million manufacturing jobs. But one study revealed that 60% of offshoring decisions used only rudimentary cost calculations, typically just price or labor costs and ignored other costs such as freight, duty, carrying cost of inventory, delivery and impact on innovation.

Advanced manufacturing now helps level the global playing field. First, the number of labor hours per unit of output is reduced. Second, the gap in the labor cost per hour shrinks. For example, a highly skilled robot engineer in China makes 1/3 to 1/2 of American pay, and not the small fraction (5% or 10%) of the low-skilled Chinese workers. In addition, acquiring capital equipment is more expensive in China because of China’s value-added tax of 13% or 17% on imports. Fortunately, the U.S. can have automation and more jobs as it reshores.

The availability of a skilled workforce is essential for bringing jobs back, ranking second among the reasons given by U.S. and foreign companies moving jobs back or creating new manufacturing jobs here. When companies reshored and failed to find the needed workforce, the transition was painful. The good news is that the bleeding of manufacturing jobs to offshore has stopped. Reshoring balanced offshoring in both 2014 and 2015. In comparison, in 2000-2003 the U.S. lost a net 200,000 manufacturing jobs a year to offshoring.

Classroom discussion questions:

  1. Explain the TCO concept.
  2. Why is reshoring more feasible now than a decade ago?

OM in the News: Getting the U.S. Manufacturing Strategy Right

Manufacturing's technological revolution may not add jobs but will drive growth in the broader economy
Manufacturing’s technological revolution may not add jobs but will drive growth in the broader economy

For years, Washington has made increasing manufacturing employment a priority, hoping to engineer a return to the time when high-school graduates could use factory jobs as a route to the middle class. “Sadly, that isn’t going to happen,” writes the Brooking Institution’s Martin Baily, in The Wall Street Journal (June 3, 2015). Of the 5.7 million manufacturing jobs that disappeared in the 2000s, only 870,000 have returned and the claim that millions more are coming back is a myth.

But manufacturing will be crucial to the U.S. economy in the future not for its ability to create jobs but for its potential to drive innovation and productivity growth, and for its role in international trade and competitiveness. That means if the U.S. is serious about promoting a recovery in manufacturing, it will stop measuring success by the number of people employed in the sector and start supporting the technological advancements that are making factories more productive, competitive and innovative. This technological revolution may result in fewer factory jobs for low-skilled workers, but it promises to benefit society by driving growth not only in manufacturing but in the broader U.S. economy, as well. Already under way, the shift is being powered by three key technology developments.

The first is the Internet of things, in which embedded sensors transmit information from machine to machine, allowing them to work together and identify maintenance problems before a breakdown occurs. The second is advanced manufacturing, which includes 3-D printing, new materials and the “digital thread,” where companies use very accurate digital models to guide all stages of product development, speeding the time to market and improving quality. Finally, there is distributed innovation, in which crowdsourcing is used to find radical solutions to technical challenges much more quickly and cheaply than with traditional in-house R&D.

Classroom discussion questions:

1. Which is more important–number of jobs or technology?

2. Describe the Internet of things with several examples.

OM in the News and Video Tip: The One Worker Assembly Line

At Japanese manufacturer Roland DG, assembling thousands of parts into wide-format printers is as easy as coloring by numbers, writes The Wall Street Journal (June 2, 2014). That’s because Roland DG makes everything from billboard printers to machines that shape dental crowns using an advanced production system known as “D-shop.” Under this method, workers in single-person stalls assemble products from start to finish, guided by a 3-D graphic and using parts delivered automatically from a rotating rack. Every worker is capable of assembling any variation of the company’s 50 or so products.

In 1998, Roland became one of the first companies in Japan to abandon the assembly line in favor of one-person work stalls modeled after Japanese noodle stands. With orders coming in smaller and smaller lots, Roland decided it needed a manufacturing system in which a single worker could build any one of its diverse products. On a recent day, one employee was assembling from scratch an industrial printer that ultimately would be more than twice her size and weigh almost 900 pounds, while another was assembling a dental-crown milling machine.

A computer monitor displays step-by-step instructions along with 3-D drawings: “Turn Screw A in these eight locations” or “Secure Part B using Bracket C.” At the same time, the rotating parts rack turns to show which of the dozens of parts to use. Meanwhile, a digital screwdriver keeps track of how many times screws are turned and how tightly. Until the correct screws are turned the correct number of times, the instructions on the computer screen don’t advance to the next step. The system is so simple, say managers, that nearly anyone can assemble products anywhere. The computer even gives workers a pat on the back at the end of the day, with the message, “You must be tired, and we thank you.”

You and your students will enjoy the 2 minute video embedded in the WSJ article.

Classroom discussion questions:

1. Why did Roland develop the D-shop?

2. What are the advantages and disadvantages of this approach over the traditional assembly line?

OM in the News: Jay Leno–The Advanced Manufacturer of the 21st Century

jay lenoAlmost everyone knows Jay Leno, the comedian, host of NBC’s “Tonight Show” and avid classic-car and motorcycle collector. Far fewer know Jay Leno, the advanced manufacturer, writes The Wall Street Journal (June 11, 2013).

Leno houses his more than 200 cars and motorcycles in solar-powered warehouselike buildings near LA that span 110,000 sq. ft. In one of the structures is an expansive shop equipped with an impressive array of 21st-century machines, including a Stratasys industrial-grade 3-D printer, a NextEngine scanner, a Fadal computer-controlled mill and a (very pricey) KMT Hammerhead water jet cutter that can slice through steel. Along with a battery of more-traditional metal machining equipment, the tools allow Leno and his small crew to fabricate just about any auto part that has been produced in the past 100 years.

“The days of going to a junkyard and trying to find an auto part that says Packard or Franklin on it are over,” Leno says. “We can make almost anything we need right here in the shop ourselves.” For his 1906 Stanley Steamer, “We took the worn piece and copied it with a scanner that can measure about 50,000 points per second. That created a digital file or image of the part, which we can modify in the computer if there are imperfections or defects in the part being scanned. Then you feed that data into the 3-D printer and, presto, you have a mold that will allow you to cast a brand new part.”

For a modest investment by virtually any industrial measure, Leno has been able to extricate himself in a meaningful way from the globe’s vast network of producers, distributors and sellers. As he puts it, “We’ve sort of gone off the grid.” He agrees that the new tools will increasingly empower other individuals and entrepreneurial ventures to make increasingly sophisticated things themselves. “Manufacturing started out with craftsmen making stuff in small cottage industries. In many ways, I think we’re going to go back to that cottage-industry model.”

Discussion questions:

1. What are the OM implications of this story?

2. Why does Leno cast his own parts?