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MANUFACTURING SYSTEMS

FOUNDATIONS OF WORLD-CLASS PRACTICE

JOSEPH A. HEIM and W. DALE COMPTON, Editors

Committee on Foundations of Manufacturing

National Academy of Engineering

NATIONAL ACADEMY PRESS
Washington, D.C.
1992



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MANUFACTURING SYSTEMS: FOUNDATIONS OF WORLD-CLASS PRACTICE MANUFACTURING SYSTEMS FOUNDATIONS OF WORLD-CLASS PRACTICE JOSEPH A. HEIM and W. DALE COMPTON, Editors Committee on Foundations of Manufacturing National Academy of Engineering NATIONAL ACADEMY PRESS Washington, D.C. 1992

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MANUFACTURING SYSTEMS: FOUNDATIONS OF WORLD-CLASS PRACTICE NATIONAL ACADEMY PRESS 2101 Constitution Ave., NW Washington, DC 20418 NOTICE: The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievement of engineers. Dr. Robert M. White is president of the National Academy of Engineering. This publication has been reviewed by a group other than the authors according to procedures approved by a National Academy of Engineering report review process. Partial funding for this effort was provided by the Intel Foundation and the National Academy of Engineering Technology Agenda Program. Library of Congress Cataloging-in-Publication Data Manufacturing systems : foundations of world-class practice / Joseph A. Heim and W. Dale Compton, editors. p. cm. Includes bibliographical references and index. ISBN 0-309-04588-6 1. Manufactures—Management. 2. Industrial management. I. Heim, Joseph A. II. Compton, W. Dale. HD9720.5.M38 1992 658.5—dc20 91-36171 CIP Copyright © 1992 by the National Academy of Sciences No part of this book may be reproduced by any mechanical, photographic, or electronic procedure, or in the form of a phonographic recording, nor may it be stored in a retrieval system, transmitted, or otherwise copied for public or private use, without written permission from the publisher, except for the purpose of official use by the United States government. Printed in the United States of America First Printing , December 1991 Second Printing , November 1992

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MANUFACTURING SYSTEMS: FOUNDATIONS OF WORLD-CLASS PRACTICE Foreword Manufacturing is a complex activity drawing upon many disciplines and technologies, reflecting management attitudes and philosophies, dependent upon organizational structures, influenced by the customers for products and by the suppliers of the many materials, machines, and equipment used to produce those products. Most efforts to develop a science of manufacturing have concentrated on understanding and improving the performance of unit operations and activities, in the belief that maximizing the effectiveness of the separate parts would result in an optimized system. Although our endeavors have provided a greater understanding of the fundamental phenomena underlying the individual components and an increased awareness of the details needed to direct and control them, we are beginning to realize that the complexity of the myriad relationships, interactions, and dependencies of the components and processes precludes such an approach to system optimization. It is now clear that ignoring the many interactions prevents good predictions of system performance and improved controls. The study on which this report is based was an effort by the National Academy of Engineering to define principles underlying the complexity of manufacturing systems. Many of the findings of this study were presented at an NAE symposium entitled “Foundations of World-Class Manufacturing Systems” held in Washington, D.C., on June 19, 1991. I would like to thank W. Dale Compton, who chaired the symposium and the Committee on

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MANUFACTURING SYSTEMS: FOUNDATIONS OF WORLD-CLASS PRACTICE Foundations of Manufacturing, and Joseph A. Heim, the principal staff officer for the project, for their efforts in organizing the symposium and in the publication of this volume. Also, on behalf of the National Academy of Engineering, I would like to thank the committee members (listed on page 254) and the authors who participated in the study and symposium. Special thanks are due to the following individuals in the NAE Program Office who worked on the publication and symposium: H. Dale Langford, Maribeth Keitz, Melvin J. Gipson, Vivienne T. Chin, and Mary J. Ball. This project was carried out under the auspices of the NAE Program Office, directed by Bruce R. Guile. Partial funding for this effort was provided by the Intel Foundation and the National Academy of Engineering Technology Agenda Program. ROBERT M. WHITE President National Academy of Engineering

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MANUFACTURING SYSTEMS: FOUNDATIONS OF WORLD-CLASS PRACTICE Preface Recognition of the complexity of the manufacturing system and the need to view it in its entirety was a principal outcome of the February 1987 National Academy of Engineering conference on “Design and Analysis of Integrated Manufacturing Systems: Status, Issues, and Opportunities. ” The conference identified a need for a more intensive search for the elements of a manufacturing systems discipline, based on the belief that a more effective characterization of manufacturing systems would benefit both practitioners and educators. In response, the National Academy of Engineering assembled the Committee on Foundations of Manufacturing in early 1989 to address the disciplinary nature of manufacturing systems. The concept of manufacturing as a discipline implies the existence of “basic laws,” a taxonomy, basic theories of design, and optimization procedures. This study has focused on the systems aspects of manufacturing and has been primarily concerned with those generic issues reflected in world-class manufacturing companies and is not intended to address operational solutions to today's manufacturing problems. The Foundations of Manufacturing Committee met on numerous occasions during 1989 and 1990 to explore the various aspects of manufacturing systems, often meeting with manufacturing experts who are not members of the committee. Individual committee members, as well as the committee, also developed a variety of characterizations of manufacturing systems and

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MANUFACTURING SYSTEMS: FOUNDATIONS OF WORLD-CLASS PRACTICE subsystems and began work on developing or obtaining data to illustrate some of the hypothesized relationships. In July 1990 the committee hosted a workshop at the NAS/NAE study center in Woods Hole, Massachusetts, for several manufacturing executives, practitioners, and university educators. The exchange of ideas during the workshop lent further credence to the need to identify the core set of principles or bases on which manufacturing systems could be analyzed, designed, and managed. The enthusiastic reception for the concept and support for the effort to define and generalize these principles led to the development of several papers (included in this volume) that focus on many of the ideas presented during the workshop. The committee draws heavily on these papers in its arguments concerning the importance of these principles and their application in the manufacturing environment. The committee designated these principles “foundations” of manufacturing because of their comprehensive applicability; they are generic, not specific to a particular industry or company; they are operational in that they lead to specific actions and show directions that should be taken; and their application should lead to improved system performance. These operating principles must be recognized, understood, and aggressively adopted by manufacturing organizations that aspire to world-class performance standards. This report provides a framework that can be used by manufacturing executives and practitioners to improve their capability to predict the outcomes of product, process, and operating decisions and to assist them in analyzing, designing, and controlling their systems. For educators and those engaged in research, the report identifies opportunities for greater exploration and the discovery of additional foundations of manufacturing systems. Furthermore, it reminds us that intense interdisciplinary interactions of the many contemporary engineering, business, and social disciplines needed by modern manufacturing systems will contribute significantly to the global competitiveness of manufacturing in the United States. W. DALE COMPTON, Chairman Foundations of Manufacturing Committee National Academy of Engineering

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MANUFACTURING SYSTEMS: FOUNDATIONS OF WORLD-CLASS PRACTICE Contents     REPORT OF THE COMMITTEE ON FOUNDATIONS OF MANUFACTURING   1      Executive Summary   3     1.  Introduction   9     2.  Overview   14     3.  Management Practice   27     4.  Measuring, Describing, and Predicting System Performance   43     5.  Organizational Learning and Improving System Performance   61     6.  Educational and Technological Challenges   78     GLOBALLY COMPETITIVE MANUFACTURING PRACTICES   83      Involvement and Empowerment: The Modern Paradigm for Management Success Nancy L. Badore   85      Implementation Projects: Decisions and Expenditures H. Kent Bowen   93      Benchmarking W. Dale Compton   100      Improving Quality Through the Concept of Learning Curves W. Dale Compton, Michelle D. Dunlap, and Joseph A. Heim   107

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MANUFACTURING SYSTEMS: FOUNDATIONS OF WORLD-CLASS PRACTICE      Organizing Manufacturing Enterprises for Customer Satisfaction Harry E. Cook   116      Customer Satisfaction Harold E. Edmondson   128      The Interface Between Manufacturing Executives and Wall Street Visitors —Why Security Analysts Ask Some of the Questions That They Do Philip A. Fisher   137      Taylorism and Professional Education John E. Gibson   149      The Integrated Enterprise William C. Hanson   158      Time as a Primary System Metric Dan C. Krupka   166      Communication Barriers to Effective Manufacturing James F. Lardner   173      Are There “Laws” of Manufacturing? John D. C. Little   180      Taking Risks in Manufacturing David B. Marsing   189      Constant Change, Constant Challenge Joe H. Mize   196      Manufacturing Capacity Management Through Modeling and Simulation A. Alan B. Pritsker   204      The Power of Simple Models in Manufacturing James J. Solberg   215      Improving Manufacturing Competitiveness Through Strategic Analysis G. Keith Turnbull, Eden S. Fisher, Eileen M. Peretic, John R. H. Black, Arnoldo R. Cruz, and Maryalice Newborn   224      Going to the Gemba Albertus D. Welliver   233      Jazz: A Metaphor for High-Performance Teams Richard C. Wilson   238      Consolidated Bibliography   245      Committee Membership   254      Biographies of Contributing Authors   256      Index   263

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MANUFACTURING SYSTEMS: FOUNDATIONS OF WORLD-CLASS PRACTICE MANUFACTURING SYSTEMS

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