Manufacturing

Slash Your Manufacturing Costs in One Move

How to adopt a simple process that can reduce internal expenses by at least 10%

Written by Gord Hobbs

It’s not exactly breaking news that industry in North America is suffering. Many consider the last bastion of manufacturing here to be engineer-to-order (ETO) production, in which knowledge workers customize solutions for individual orders.

ETO production is a labour-heavy process that usually involves lots—and lots—of intervention from engineers.

Yet all too often these engineers aren’t operating as efficiently as they might. Delivery times for domestically produced high-end ETO products can exceed 16 weeks—not exactly the agility manufacturers, or their customers, want.

Engineering work consumes about half that time. Furthermore, since most administrative activities in the production cycle are dependent on receiving technical documentation, engineering is perhaps the biggest bottleneck in Canadian manufacturing today.

This obviously affects the bottom line. When engineering delays occur, the cost of the finished product goes up, production gets backlogged, deliveries get delayed and customers get impatient. Hardly a great way to sell “made in Canada.”

Related: Why it’s not always cheaper to source internationally

It doesn’t have to be this way. In fact, there’s a simple six-step process to streamline the thinking processes necessary to design, price and sell a complex custom product. It’s called lean engineering, and it warrants your attention: employ it correctly and you can cut your internal costs by at least 10%.

What is lean engineering?

Lean thinking dictates that every process can, and should, be continuously improved. If we formalize the knowledge work performed by engineers as a series of defined steps, and then automate processes that are both standard and constantly repeated, it eliminates the costly overhead that can devastate SMEs. It’s an extension of the same philosophy already applied on the shop floor by smarter companies.

Engineers working in a custom manufacturing environment may argue that the work they do is too varied to be automated. That may sometimes be the case.

But in order to grow profitably, your company has almost certainly specialized in a specific product type or market niche — and the smaller you are, higher the likelihood that your focus is extremely tight.

Chances are, you’re dealing with a relatively narrow range of product configurations and features that serve as the basis for near-infinite solutions to unique customer specifications. Therefore, it’s reasonably easy to automate many parts of the design of a custom product family. Simply follow these six steps:

1. Organize your offerings. Organize product lines into families that share similar performance characteristics and differ only in optional feature configurations and dimensional variations.

2. Define your rules. For each family, devise a set of specifications, and also the acceptable range of values used to combine an arbitrary mix of specifications into a viable product solution.

3. Gather data on off-the-shelf offerings. Create a shared database of information about commercial component standards—things like fasteners and plates. This is the raw data required for engineering decision-making, and having it readily available will eliminate a ton of time.

4. Automate your decision-making. Deploy software with algorithms to replicate manual engineering processes—such as filtering allowable assembly configurations—and linking the routines into a comprehensive decision-making tree. This will be your go-to source when designing a custom product.

5. Use the data to make a prototype. Apply this automated environment to generate 3D digital CAD prototypes of a proposed custom product. If you’ve organized things properly, youou can do this on demand simply by submitting a set of product specifications through a user interface. Specialized software for this purpose is commercially available.

6. Create a workback. Use a 3D digital CAD prototype to review a proposed product, then to generate accurate part and assembly drawings, a bill of materials, a process plan and even compelling sales materials.

The result is that routine technical work, which represents the manufacturing bottleneck, is replaced with an automated system that can design an engineered product to meet most customer requirements.

This means that engineering data on all products is available to everyone on staff—regardless of position. Using this system, a salesperson or, say, a customer-service rep can generate a viable product design.

Perhaps best of all, engineers, the most valued industrial knowledge workers, are now free to innovate with new products and processes rather than perform tedious drudgework.

The engineering bottleneck should never be an obstacle to a custom manufacturer’s growth. Lean principles long applied by repetitive manufacturers are now applicable to engineer-to-order producers. Automating proprietary knowledge processes adds significant value to a company’s equity because it minimizes dependence on key technical personnel. It’s the way of the future: the truly profitable manufacturer of tomorrow will have automated as much as possible.

Gord Hobbs P.Eng., is co-founder of Logicap Engineering Corp., a Cambridge, Ont.-based engineering software firm.

Originally appeared on PROFITguide.com