The introduction of automation in the manufacturing process for MK20 at ITT led to a discussion about the most efficient level of automation across different plants. The tradeoff between cost and flexibility is always taken into account when talking about automation. Essentially, there are multiple perspectives to consider when looking at the financial implications of automation. Automation entails utilizing control systems and information technology to reduce human labor in production, especially for tasks that require physical intervention, ultimately resulting in enhanced process performance.
The implementation of automation in production has several benefits. Firstly, it reduces manufacturing time and increases production volume. Additionally, automation improves product quality and streamlines quality assurance activities. As a result, the number of defective products decreases, leading to a reduction in rework or the need to dismiss products. This ultimately helps avoid unnecessary extra costs. However, it’s important to note that automation also necessitates the presence of skilled operators to effectively operate the processes and control devices.
The acquisition of these skills is more costly for technicians than for regular workers, which is why ITT decided to keep assembly processes that require high skill levels in countries with higher wages like Germany. This decision will ultimately impact employment due to the associated costs. With automation replacing manual tasks, there will be a reduced demand for a large workforce. Although automation lowers expenses, it also sacrifices some degree of flexibility.
The control system will define and program the process, making it difficult to adjust or change if necessary. Any adjustments or changes will need to be done manually. Moreover, depending on the control system for process control may lead to a lack of intelligence or error correction, and it could hinder the identification of quality issues. Additionally, there is also a concern regarding automation as customers have varying preferences.
The US customers prefer to have their own production lines, which may be challenging with the new automation process. However, the robots will be adaptable enough to adjust assembly processes based on product requirements, known as the “flexible route”. Contrary to a manager’s claim that automation leads to stagnation, I believe this statement is inaccurate. Automation will greatly benefit ITT’s long-term manufacturing strategy. The key is to discuss implementing automation when the plant culture is not fully ready to embrace it, and instead create a transformation plan. In this cost-driven market, it is crucial for the company to be competitive by increasing automation and reducing costly manual tasks. Thus, automation is a significant development that will keep the company competitive in this fast-paced industry.
Implementing standardized process technology in all plants offers numerous benefits. These advantages encompass global sourcing, improved capacity efficiency, and the ability for plants to capitalize on shared knowledge and experiences. Nevertheless, variations in customer and supplier requirements across different regions can impede the flexibility of adopting standardized manufacturing processes tailored to their specific needs. Henceforth, I propose a two-part recommendation. Firstly, we can strategize the transition to full automation by planning it in multiple phases.
When considering customers in different geographical areas, it is important to analyze the specific nature of these customers. By doing so, process enhancements can be made to accommodate the differences with US customers and suppliers while still maintaining the essence of the standardized process. For instance, the issue of quality with US suppliers of ITT (50,000 out of 1 million) can be incorporated as an amended part of the standardized process, allowing for defected parts to be redirected to a special process.
The proposal is to meet customer requirements and preferences by establishing a dedicated production line for each customer, based on their volume. The rationale behind this is to acknowledge the significance of variances among different geographical markets, and to ensure both customer satisfaction and adherence to the company’s manufacturing strategy in a fiercely competitive market that demands prompt responses to customers. Jurgen Geissinger plays a vital role in the triumph of ML20.
This indicates that he may find himself in a situation where he needs to make crucial decisions, particularly regarding automation and standardizing processes. These decisions not only impact costs and flexibility, but also the overall culture and environment of the plants. Typically, when employees are accustomed to a certain routine, they are hesitant to embrace change due to the potential for job cuts and the fear of taking risks. However, plant managers understand the long-term benefits of automation and are confident it will be implemented.
To address the situation at Ashville plant, the plant manager has stopped hiring new employees and asked current staff members to acquire the necessary skills for automation. The company has invested in this effort by providing payment and reimbursement for employees. Gradually approaching automation is deemed as the most effective approach. At Ashville plant, there seems to be more resistance towards automation compared to Morganton plant. If I were in Geissinger’s position, I would prioritize implementing automation at Morganton plant because the workforce there is already familiar with it, thanks to MK4-Gi’s high level of automation.
A transformation plan can be defined in the Morganton plant to set up the equipment for MK20 according to the specified setup dates. This process will be simpler in Morganton, as the manufacturing process was designed at the start of product development, incorporating standardization by default. Any problems or issues related to US customers or suppliers can be identified and resolved as the implementation progresses, phase by phase. Once the transformation process begins in Morganton, Ashville should also be addressed to ensure smooth implementation.
The proximity of the two plants should be utilized to ensure the success of Ashville’s transformation. Any knowledge gained in Morganton can be easily applied in Ashville when necessary. Additionally, the approach towards Ashville should follow a gradual and phased plan to prevent disruptions in current processes and practices. This will also allow for sufficient time for employees to learn the required skills for new automated processes. Lederer, as the head of ITT Automotive/Teves, is responsible for maintaining the company’s competitive edge and achieving market leadership.
The low-cost strategy is crucial for sustainable competitive advantage in the manufacturing industry that ITT Automotive operates in. This strategy, which follows the principle of target-costing, aims to address cost issues without compromising product quality or manufacturing functionality. To remain a leader in terms of cost, a business strategy should be developed as the industry continues to introduce new generation products that are more sophisticated and less expensive.
One possible approach is to categorize various assembly processes based on their complexity. This would involve assigning unsophisticated subassembly tasks to low-wage countries. This approach would help to reduce costs while maintaining flexibility in the manufacturing process. Standardization of processes and equipment would also be beneficial, as it would enable more efficient service to clients and eliminate unforeseen problems through collaboration between plants when necessary.
Automation can greatly enhance product quality, and suppliers should be encouraged and warned to reduce defect rates in their products in order to minimize related costs. Additionally, modular design can enable increased customization for customers while still maintaining automation and process standardization.
