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Squeezing Out Factory Costs

These manufacturers place automation high on the list of ways to save money in the factory.

As the economy continued to struggle during this year’s first half, many manufacturers were looking for ways to wring additional savings out of their factory operations. But what are the best ways to do that?

“Squeezing Costs Out of Manufacturing” was the topic for a panel of automation end users assembled recently by industrial automation vendor Omron Electronics LLC, Schaumburg, Ill. The session was part of conference late last month for trade press editors. And not surprisingly, automation came up big on the list of solutions put forth.

Panelist Eric Culberson, a senior project engineer at Shell Solar Industries LP, a Camarillo, Calif., maker of photovoltaic cells, described how his company is converting a previously all-manual manufacturing process into “a totally automated factory.” At a time when much U.S. manufacturing is moving offshore, Culberson said the Shell Solar automation project is an effort “to stay competitive so we can remain a U.S. company for our manufacturing.”

So far—with two out of four planned automated assembly cells up and running—the results are positive. Automated cell number one relies on conveyor systems and Fanuc robots to perform initial operations on the photovoltaic materials. The cell has allowed a direct labor reduction of 24 operators, while increasing throughput by more than 100 percent, said Culberson–all for an investment of about $2.1 million.

Automated cell number two, in which a robot assembles and attaches frames to the photovoltaic materials, cost somewhat less, at $1.4 million. But that cell has likewise more than doubled production throughput, while eliminating the need for a dozen additional operators, said Culberson. Two more highly mechanized cells to complete the automation project will be running by yearend, he added.

Stop watch worries

Culberson and other panel members conceded that they do encounter concerns from some factory employees who feel threatened by automation initiatives. “When my engineers go out on the floor with a stop watch and tape measure, people get nervous,” said Dennis Klotter, assembly engineering manager at the Birmingham, Ala., plant of Ogihara America Corp., which does stamping and sub-assembly of automotive body panels. Ogihara relies on highly automated production systems with real-time tracking and analysis of multiple process variables, as well as monthly scorecards for every department, among methods to drive continuous improvement, said Klotter. But no full-time employees have lost jobs due to automation at the plant, he added, in part because the company makes extensive use of temporary staffing.

Shell Solar likewise uses temporary staffing services, said Culberson, who also noted that employees whose jobs may be displaced by automation are provided access to training opportunities. “If they don’t continually reinvest in their skills, then they won’t be able to grow with Shell,” he said.

“Having the best-trained people,” in fact, was cited by Joe Jansen, another panel member, as one of the three factors key to remaining competitive in manufacturing. The other two are “producing the highest level quality,” and “using leading edge technology,” said Jansen, a controls technician at Kemet Electronics Corp., a Greenville, S.C.-based capacitor manufacturer.

Jansen said that the current economic downturn provides a good opportunity for manufacturers to invest in all three of these areas as a way to be ready when the upturn arrives. For example, during the economic slowdown, Kemet is performing an evaluation of many of its engineering and automation tools, Jansen noted. “We’re committed to using the best tools available,” he said. “We are taking a look at what have been our corporate standards for many years, and we’re reevaluating whether these are still the best products to be using, or if it’s time to move on to something else.”

No tool unturned

The evaluation includes everything from computer-aided design systems, simulation tools and programmable logic controller programming packages to the human machine interface systems used by automation equipment operators. And Kemet has made some changes, he said, selecting new design tools, for example, that have already paid off by reducing machine and process development times.

Squeezing costs out of manufacturing is “not all outsourcing or buying cheap components,” said Jansen. “Reducing the cost of manufacturing means committing the resources needed to have the best possible process that you can,” he advised.

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