Cells produce at lowest cost

Modern Machine Shop, May, 1995 by Michael Page

The Isle of Man, 12 miles wide by 24 miles long, is located in the Irish Sea between England and Ireland. Sir George Dowty's operation has had a presence there since 1939. After 1945, the company continued to supply parts to the UK's Dowty Group (now part of the TI Group) and became Dowty Aerospace Isle of Man (DAIM) in April 1991.

Precision hydraulic valves compose 70 percent of DAIM business. The remainder includes associated hydraulic equipment, such as aircraft door locks or undercarriage release gear. After the Cold War ended in 1992, the aerospace related business declined. General manager of DAIM, Malcolm MacDonald, says the company could no longer use traditional manufacturing techniques and hope to compete effectively in a shrinking market. The company decided to throw out typical compartmentalized manufacturing and associated hierarchical administration systems because of problems such as high overhead, poor on-time delivery and high inventory.

Product mix involves a large number of small batches of a high variety of precision components. For example, valve spools and sleeves machined in high tensile steels and heat treated, are finished ground to within 1[[micro]meter]. Cast or forged high tensile steels and aluminum alloys are used widely.

DAIM reorganized production into dedicated cells - each cell is run as a profit center with all administration functions on board, even the accountants. This is reflected in company performance. In 1994, approximately 145 employees turned more than [pounds]6.5 million compared with the 1991 performance of [pounds]7.4 million with 245 employees. Cells reduced manufacturing lead-time, stocks and production inventory by 50 percent. On-time delivery performance was raised from 59 to 98 percent while arrears dropped by 80 percent. Quality rating now stands at 99.9 percent.

To introduce cell concepts, the company trod very carefully. It first established a small prototypical cell and operated it for six months. It involved three well-motivated employees and their machines, selected from three different trades, and were moved to a small area. Proving successful, it was enlarged into a pilot cell, involving eight employees and 15 machine tools. Intended to operate for a year, the pilot cell proved to be successful inside six months.

So DAIM decided to reorganize the whole workforce into eight cell teams and in two major groups:

Manufacturing

* Valve bodies

* Valve spools and sleeves

* Kits of parts

* Detailed parts

Support

* Assembly/test/processing

* Purchasing

* Shop services

* Central.

Before the reorganization, DAIM scrapped a traditional output related bonus scheme because employees were reluctant to do "indirect work" such as deburring. The company considers this action was the most critical factor in successful cell operation. DAIM also scrapped employee time monitoring.

In the valve bodies cell, a good example is the Polaris valve body. It used to require 90 operations, including honing. Now 70 of those operations are incorporated in four machining center setups using 92 tools. Only 16 setups are now needed. Total setup time for the valves was 43.5 hours now reduced to four hours. Leadtime was reduced from 150 days to 59 days.

Cell operation is not restricted to the shop floor. Production and quality audit engineers, respectively responsible to a chief production engineer and chief quality engineer, joined the production cells.

Even the finance department was incorporated into a cell. Chief accountant and company secretary, Maurice Jones, says having machines idle doesn't worry anyone. He says it's profits that count, so there is more concern with stock control. Now the "policing" requirement is gone. The role is much more one of support, offering advice on financial control to team leaders. Accountancy staff levels have been halved. In all cells seem to make good sense.

MICHAEL PAGE European Correspondent London, England