Still, the benefits far outweigh the costs. "Before the PLCs, it was hard to measure the effects of changes in things like temperature or timing," Hanauer notes. "Now we've been able to take out a lot of the sloppiness and to maximize throughput."
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Timing Is Everything When technologies like CAD/CAM, CNC, and PLC work, the gains in quality, productivity, and finally, profitability can be astonishing. But sometimes, even when a company has savvy, big bucks, and internal and external expertise, those same systems can trip it up. That was the situation for Orco Block Co., a $15-million concrete-masonry producer in Stanton, Calif., that turned to a manufacturing resource planning (MRPII) system to solve its production-planning problems.
Rick Muth, Orco's president, never expected his cautious investment to end so badly. It all began in 1980, when Muth purchased a custom-written MRPII system that ran on a minicomputer from Prime Computer. The idea was to take some of the drudgery out of scheduling and filling orders for Orco's five production facilities so the company could focus on customer service and product development.
The MRPII system pretty much did what Muth wanted it to: grind out comprehensive production-planning reports. But the hardware -- along with the operating system -- it ran on was another matter. "It was a dinosaur," Muth says. "We knew we had to move to a standardized computer and operating system." So in late 1993 he hired the local office of Chicago-based Arthur Andersen to survey the market and find the best system for Orco. Months later Andersen presented Orco with several options, and the company selected an MRPII system from a small firm in Minneapolis. It would draw data from an Oracle relational database and run on a Hewlett-Packard HP9000 minicomputer with a UNIX-based operating system.
Muth says the MRPII system looked great during the software vendor's demonstrations. But then came the big day when Orco switched off its old system and cut over to the new. "It was a bomb," says Muth. "We couldn't get many of the reports we had been doing for 14 years, much less attempt many of the new applications." An Andersen spokesman says Orco's problem is typical of small companies that switch or update major systems: "They underestimated the time needed to manage this kind of change," he says. "You either adapt or you opt out."
After numerous attempts to solve the software bugs, Muth decided to abandon the package. He reports that Orco is now trying to resolve the problem with Andersen and recoup some of its investment. In the meantime, the company is evaluating MRPII systems from Computer Associates International (516-342-5224). Muth hopes the new system will have industrial strength, allowing him to get back to managing the business. "I've been spending too much time on technology," says Muth. "It's just the wrong place for me and my company to put our energy at this time."
Muth's experience is instructive: it's not only what companies do to bring technology to the factory floor but when they do it that determines success. If the timing's right, factory automation can be a win for management, employees, and customers. BG Fuel's Grant should know. "There was no way I could lose by making this investment," he says. "Now we can pay our people better, keep prices in line, and produce a better product."
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Brian McWilliams (bmcw@aol.com) is a freelance writer based in Durham, N.H.
GETTING HELP
Several state and federal programs provide free or low-cost technical assistance to small and midsize manufacturers. Some good places to start:
Agility Forum, Bethlehem, Penn. (800-9BE-AGILE, http://absu.amef.lehigh.edu). Consulting, training, and education services on agile manufacturing principles from manufacturing experts.
Manufacturing Assistance Program, Oak Ridge, Tenn. (800-356-4USA). Limited free technical assistance from U.S. Department of Energy scientists and engineers.
Manufacturing Extension Partnership, Gaithersburg, Md. (800-MEP-4MFG). A nonprofit network of more than 200 field offices in 42 states and Puerto Rico providing federal, state, and local services.
WHAT'S IN A NAME
Overwhelmed by the myriad applications available for retooling the factory? Here's a brief glossary to help you sort them out:
Computer-integrated manufacturing (CIM). Applying information technology to production processes and organizational structure to streamline operations. Often focused on integrating systems and processes distributed across a company, such as order entry, scheduling, and production.
Computer-aided design (CAD). High-performance design workstations that enable designers to manipulate parts diagrams and simulate operations, among other things. Can be linked to computer-aided manufacturing systems.
Computer-aided manufacturing (CAM). Systems designed to facilitate manufacturing, including computer numerical control (CNC), robotics, materials requirement planning (MRP), and process control.
Computer numerical control (CNC). A means of operating production machines (most commonly punch presses and machining equipment) by numerical-control instructions generated by CAD/CAM or from a programmable logic controller (PLC).
Programmable logic controller (PLC). A simple computer capable of coding, storing, and downloading numerical-control instructions to multiple machines without the use of tapes or punch-card readers.
Materials requirement planning (MRP). Planning system for production operations that includes scheduling, materials billing, and inventory management.
Manufacturing resource planning (MRPII). A more recent, expanded approach to MRP that also considers issues such as purchasing and forecasting.
