By Jim Montague, executive editor
The customer is always right. Now, you just need to know what he wants. Oh, and you also need to figure out what he needs before he knows that he needs it. And, finally, you have to deliver both at the lowest possible price. Sound difficult? You know it is.
For instance, Bill Bargholtz needed a few parts—at least 5 million per year—and a little help.
As senior manufacturing engineer for Ark-Les Custom Products (ark-les.com) in New Berlin, Wis., Bargholtz recently sought and found a way to upgrade and assemble the six-part, hidden washer-lid switches his company makes for Whirlpool’s washing machines. These complex, cigarette pack-sized switches are difficult to put together because they contain a set of small, tricky spring contacts.
Because the volume that Whirlpool needed justified automating Ark-Les’ assembly process, Bargholtz wrote a detailed, six-page specification that machine builders could use to draft bids. Eight were completed and sent back to Ark-Les, including several on CAD files and one pencil sketch. “You need to specify everything, so when you start using a machine, it does exactly what you want,” says Bargholtz. “I’ve seen enough misunderstandings to know they can cost you double before you clean up the mess. The bids ranged from things I knew wouldn’t work all the way to the Mercedes Benz of machines.”
Little, Big Assembly
Figure 1: Ark-Les reports that its Mikron G05-based system paid for itself in less than half the time originally planned.
Users Growing Up
Whether driven by economic forces or technological advances, machine builders increasingly are joined at the hip in long-term relationships with their end users, who are requiring them to go ever further above and beyond the call of duty. Luckily, some of the keys to success are based on some good old-fashioned values, common sense, and interpersonal skills.
“Our users are becoming more educated and savvy,” says Frank Lauyans, president of Lauyans & Co. (lauyans.com) in Louisville, Ky., which builds engineered material handling systems. “There are more of two main types—those who know what they want and seek the best price, and those who think they know what they want but lack some knowledge and have to rely on vendors a bit more.”
For example, Lauyans recently developed the NAO 8 parts storage system to assist users of its vertical lift modules (VLMs), but also decided to release more information than usual about it on the Internet to aid its educated users. “We even exposed pricing information,” says Lauyans. “We reason that the more we teach our customers, then the better they’ll be able to shop. Also, bringing our models to the Internet allows smaller customers to use them, too, and helps us assist them as they grow.”
Procedures and Potholes
The basic process of end users seeking quotes from machine builders, builders submitting proposals, and the subsequent back-and-forth meetings that lead to purchases and installations remains much the same as ever. What has changed is the growth of their respective specifications and to-do lists, the increased level of cooperation between builders and end users, and the lengthening of their relationships.
“We begin with a consultative effort to find out what a particular user needs, and that means a lot of questions about what they’re trying to do,” says Paul Beduze, Mikron’s business development manager. “We also make sure a potential end user is a good fit for our narrow focus, and that a project will have a good ROI. For instance, we define anything less than 100,000 parts per year as manual assembly, so we need to calculate parts per hour labor costs and payback time to decide if a proposal will be worthwhile.”
Convince the Deciders
Though there are times when an end user’s engineers have purchasing authority, the usual path for machine builders lies through a thicket of decision-makers in management and accounting. “It’s great when engineers make the decisions, but it’s rare,” says Lauyans. “Usually, the person you’ve convinced to use your machine isn’t the one who will decide to buy it or not. Some customers will have their engineers spec out a machine, but once the decision-makers have credible vendors, then all they’ll ask about is price.”
For example, when his firm previously worked with Bridgestone/Firestone, Lauyans says he asked the tire company’s representative if he always had to buy the lowest-priced equipment. “He told me ‘No,’ but added that they probably wouldn’t ever go 5% over the lowest price,” says Lauyans. “And, he added if they ever bought above the lowest price, they’d have to write up a report, which he said they never would have time to do.”
Lauyans adds this and other disincentives against buying better quality/more costly solutions by purchasers can force builders to initially present equipment to fulfill their specs, but then have to cut out support to meet required costs.
Overcome Inertia and Fear
Close-minded and arbitrary organizational rules thrown in the way of innovation just make it that much more crucial for builders and supportive end users to pile up evidence to help justify investing in improved machines. Builders and their advocates need to quantify each efficiency anticipated and the savings it will generate, so they can push forcefully for their management to invest in it. There are many helpful formulas for doing this, including overall equipment effectiveness (OEE), and most are easy to use (see sidebar "Using OEE to SUPPORT ROI" at the end of this article).
Despite all the efficiencies and savings to be gained, machine builders say some end users remain unwilling to invest, and refuse to adopt technology that still will be useful in 10 years. “Some users say, ‘I just need what will get me by,’ but when it breaks on the next project, then it’s too late,” says Beduze. “There’s also a fear factor when some users think about running an automation system for the first time. They look at it and say, ‘I’m supposed to maintain that? No way,’ and decide to keep their six manual operators.”
Lauyans says the best way to meet and exceed users’ expectations is to be quiet, listen, and become fully aware of what they need, but that developing this skill isn’t easy. “You have to truly listen to each customer, understand their needs, and learn how they conduct purchasing,” says Lauyans. “This was hard for me to learn, too.”
The old ways of selling machinery and dealing with customers are changing, and change is difficult. “Every end user expects to get more and pay less, and we have to step up to the plate, but do it without jeopardizing our own performance and profitability. We never used to believe we could provide more, charge less, and still earn a profit, but it can be done with available technology.”
For example, Lauyans adds his company is using more AutoCAD and 3-D modeling software to direct the laser and plasma cutters that create its own machine parts. This increases accuracy and reduces labor required to build its conveyors. “We’re an end user, too, and we prefer to do business the old-fashioned way by maintaining long-term relationships,” adds Lauyans. “So, we don’t always look for the lowest-priced equipment, but do invest in what will work best in the long run.”
Work Closer and Follow Up
Because end users want to use the fewest possible OEMs, builders are being asked to provide more and varied services. “Users want one source for their assembly and packaging, and so they’ll ask us to do both,” says Beduze. “So, we have to find a packaging machinery supplier, integrate its machine with ours, and ship them together. There’s an increasing desire among users for turnkey suppliers and services on big systems. In fact, many builders no longer think about selling one machine, and instead do consultative selling. Now, a user’s team will approach us, and ask, ‘How can you help us?’”
Cut to the Chase
Figure 2: Messer MG’s TMC4500ST gantry cutting system uses open standards hardware and software to achieve in-house customization of its HMI.
To continue meeting a user’s needs after a sale, Messer MG Systems & Welding (mg-systems-welding.com) in Milwaukee makes follow-up calls and visits to its clients, and conducts customer satisfaction surveys every three months for a year after installation, according to Mark Ringgenberg, Messer’s technology product manager. The firm makes plasma and oxy-fuel cutting machinery (Figure 2). “The responses usually are, ‘It’s working great’ or ‘I wish it could do this,’ and so we address any issues that come up, but we also use this input to develop new machines that are easier to operate,” says Ringgenberg. “Many users still want a black box where they can put raw material in and get product out, but they also want more productivity by capturing true costs and then minimizing them.”
Sadly, he says users across the U.S. report it’s getting harder to find machine operators. “So, they need us to design CNC controls that are more user-friendly and easier to be trained on,” explains Ringgenberg.
“Consequently, we try to automate as many standard, repeatable functions as possible, so there will be fewer steps in producing parts.”
Consequently, a good, long-term working relationship is very precious for one simple reason—trust. “It gives both participants the freedom to do their best work,” says Lauyans. “It gives a builder the chance to give a customer more of what they need. However, it’s hard to quantify in financial terms.”
Success With Standardization
Mike Lamping, PE, engineering technology leader at Procter & Gamble (P&G, pg.com), says the pressure end users put on machine builders for higher speeds, better coordination, improved mean time to repair (MTTR), and lower total cost of ownership (TCO) is a transference of the market demands put on product manufacturers.
One way to make lives easier and use standards to reduce costs is to harmonize the definitions and techniques used to perform manufacturing functions. Creating guidelines and then standards that users and builders can use to develop and build machines will improve their manufacturing costs and systems. To this end, Lamping chairs the PackML packaging workgroup within the Open Modular Architecture Controls (OMAC, omac.org) Users Group, and is a member of the Make2Pack standardization effort. PackML’s organizers began developing their guideline more than seven years ago. Version 3 of the PackML guideline is out for a vote as an ISA technical report on implementing Part 5 of the S88 standard.
Standards Aid P&G’s Applications
Figure 3: Procter & Gamble uses PackML’s operational standard methods to generate consistent data and achieve a common, functional machine perspective.
“Consistent data for information systems is generated by standard methods and definitions. PackML, which is based on the ISA/S88 standard, is about driving an operational standard, which is a common, functional machine perspective. PackTags are about driving a data standard, which is a common, basic machine data record,” says Lamping. “There’s a big benefit to having just one state model to learn for machine operation and data acquisition. It’s independent of time and technology, and is reusable code. It provides common tag naming that improves time to install and integrate machines, and maximizes uptime.”
Comments about PackML from P&G’s engineers and production staff include:
- “On the packaging job, PackML helped during startup of multiple machine modules. The line came up in no time. We should be exploiting this, educating people, and rolling it out whenever we can.”
- “Plant E&I loves it. After the technicians were trained, they asked, ‘Why aren’t our converters like this?’ It’s been a big help in troubleshooting.”
- “On new machines there’s a huge advantage in having to learn only one programming methodology.”
- “In February 2007, new PLC software on Line 6 achieved an 8% gain in PR by using the modular code for programming.”
As a result, says Lamping, “P&G’s Beauty Care business unit incorporates OMAC’s PackML Version 3 state model standards in its bid packages to OEMs.”
Likewise, to provide useful statistics, operational data, and batch production information, Beduze adds that Mikron developed its own proprietary software on top of Rockwell Automation’s RSLogix software kernel for its G05 standardized, modular assembly chassis. “Most of our machines use standard, modular parts,” says Beduze. “This helps our engineers in Denver decide the best way to meet a customer’s individual needs with the most appropriate component, and makes it easier for users to reuse parts several times and save on their capital investment. Sometimes you have to get a new machine, but this is becoming less frequent. We try to keep our end users’ investments moving forward through our products’ lifecycles for as long as we can.”
Excellent at Exceeding
Ringgenberg adds, not only are Messer MG’s users seeking turnkey machines, but they’re also demanding full-service, one-source installations. “Some users don’t want to coordinate hiring an electrician for a project, so we reroute calls, and try to make our engineers more accessible,” says Ringgenberg. “We now dedicate almost a half-time engineer to handling these calls. Our service department used to do it, but this frees them up for troubleshooting. When we noticed that about 20 recent calls were on the same basic topics, such as power requirements, grounding, rail installation and gas installation, we created some new instructional documentation, and sent it out to our users. Even though most of our machines are customized, we’ve produced three videos on common elements in our production lines.”
In addition, Ringgenberg explains that Messer MG’s global presence helps it with new ways to assist users. “Minor equipment issues in one country can be real hot buttons in another country,” he says. “For instance, safety concerns and remote monitoring are a bigger issue in Germany. Users there appreciated it when we added cameras to some machines, and these are now available in the U.S. In China, high volume, robust devices are a high priority, so we shipped a bevel head we make here to our users there, and our divisions cooperated to implement it. This head puts a bevel-edged channel on parts to allow better welds.
“We sometimes say the ‘product manager’ title should go away and be replaced by ‘project manager.’ We do so much scheduling and other services during installation that we’re becoming a lot more like contractors.”
Even during the buy-off visit that Ark-Les’ staff made to Mikron before accepting delivery, the builder’s engineers made an extra effort to demonstrate how Ark-Les’ specific system would actually run at its plant, including the bowl feeder that separates parts before assembly. In fact, Mikron’s system at Ark-Les has paid for itself in less than half the time projected, mainly by reducing labor costs. Mikon’s solution requires one employee, while the production line for an earlier washer switch needed 12 assembly workers and two maintenance staff.
“If you can put less labor into a process, you can give your customers a better price and still make a nice profit. And, we gave Whirlpool a better switch besides,” adds Bargholtz. “I gave Mikron a product and a process, and they came back and told me what it would cost. I know Mikron’s people now, and they know us. They understand where I’m coming from.”
Using OEE to SUPPORT ROI
The classic equation for overall equipment effectiveness (OEE) can help identify areas for improvement and potential investment in manufacturing processes, and so help machine builders and end users lobby and convince decision-making management and accountants to spend on needed machines. The equation assesses incremental revenue opportunities, and allows benchmarking against similar or competitive processes. The basic equation is:
% OEE = (% Availability) x (% Productivity) x (% Quality)
% Availability = actual production time/possible production
% Productivity = actual production/optimum capacity
% Quality = product produced - scrap and rework/product produced
HE SAID, HE SAID
Some machine builders say end users refuse to invest in new solutions because they just want to get by for today. Some users say builders resist making new, standards-compliant technologies available. Who has it right? Are there any ways they can communicate better besides sitting down and having a heart-to-heart chat? Weigh in at ControlDesign.com/communicate.