This case study should only be used after Boys and Boden (A) which gives back- ground...

 

  
 
 

  
 
 

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This case study should only be used after Boys and Boden (A) which gives back- ground information on the business and on the issues involved in setting up the cellular manufacturing system for special staircases. Cellular production The staircase cell had been a great success! In well under a year, the company had established an enviable reputation for high quality, quick delivery and very compet- itive prices. The best production configuration had proved to be a rectangular area of the factory, equipped with a full set of the requisite machinery (bench-saw, planer-thick- nesser, spindle moulder, tenoning machines, surface sander, assembly benches, etc.) and two skilled joiners (carpenters). They worked well together and their productivity was dramatically higher than had ever been seen in the job shop environment. As a result of the increased competitiveness, volume was increasing, but attempts to use three men had proved unsatisfactory. Given the limited space available, they seemed to be getting in each other's way, and productivity fell, reducing the benefits of cellu- lar manufacturing which had been found in the earlier months of the experiment. There was always a feeling that 'two's company and three's a crowd', as the two- person cell seemed to work as a better team than three. Dean Hammond, General Manager of Boys and Boden (B&B), reflected on their experience of changing the staircase production system: 'This has been one big learning experience for us all! We knew what machinery we would need, but it was not at all clear in advance how much space would be used pro- ductively and how the men would take to more repetitive work. Hardly any of their staircases are identical, but they do only make staircases, whereas before they would have moved on to windows, doors, and all sorts of other special items required by a mul- titude of customers. In practice we should not have worried, since the two men immediately took responsibility for their work area, sorted things out, and developed a pride in their specialised work. 'With only one cell, our output was clearly limited, so we began to think about adding a second identical cell. This would certainly introduce an element of competi- tion, which could have a positive impact on productivity and quality. However, we felt that this was not really the only way of expanding capacity. Perhaps there were ways of 196 introducing technology to simplify all the manufacture of these specialised staircases. In fact, this seemed to be one of the few industries left where most of the technologies. had changed very little during the micro-electronics revolution. Making specialised join- ery remains the domain of a diminishing number of highly skilled craftsmen, and the number of good quality apprenticeships had declined dramatically over the last 20 years. I knew we had to rethink what we were doing, and I knew this was an opportunity to focus on high-value-added products with relatively certain levels of future volume. 'For each job, the joiners start by "setting out" the strings (the long sides of a stair- case), drawing at full scale the overall shape and positions of cuts and grooves to be made in the wood. They get the required information from detailed drawings included. with the production specification. This specification is sometimes provided by the cus- tomer, but more often is prepared in the drawing office here. The setting out is a very time-consuming step, taking up to two days for all the components of a really complex staircase, for example, a flight of stairs which turns through 90 or more degrees, known as a "winder". The selling price of large, complex staircases can be very high, but the work content is correspondingly large, so our margins are not always that great!" The seed of an idea.... 'Whilst watching the staircases being made, I came to realise that the men were, in effect, duplicating. work done in a drawing office the data is same, but scaled. up from the drawings. If we were to grow this business, we would need to find ways of increasing the overall productivity of the system. We knew that there should be a way of getting the data directly transferred to the wood, and I know this has been achieved in many industries using CAD/CAM, so a few months ago I started investigating the possi- bility of purchasing suitable systems. There are several reputable manufacturers that make large computer-aided manufacturing (CAM) machining centres for use in the metals industry, but there appears to be only a few specifically developed for the wood- working industry. I then identified one German supplier that can modify and enlarge one of its largest machines for our application, but there will be an element of experi- mentation and innovation involved here. They do have some experience with wood machining, but only for small components. Our staircase strings are up to five metres long! By the time the clamping tables have been extended, this will be an extremely expensive piece of equipment! 'It is clear that there are a few very large manufacturers of staircases in the UK, but they specialise in standard sizes which are sold in huge quantities to large builders and merchants. They are, in effect, making commodities and their manufacturing systems are designed to make large batches of standard components, which are then assembled on production lines. It is clear that we will never be able to compete profitably in this. part of the market. However, an increasing number of house builders are using stair- cases as an attractive feature of hallways, and some of these require more complex shapes (including winders) and better finishes [an example is shown Appendix 18.1]. In addition, refurbishment of existing houses often requires the installation of special staircases designed to fit into awkward spaces, and with non-standard heights. There is also increasing demand for expensive feature hardwoods such as oak and beech, which are not usually mass-produced. These changes are providing an opportunity for us to Part 3 Design become a specialist, not just serving our local area, but providing non-standard stair- cases throughout the country. For this to be competitive, our quality will have to be excellent, our delivery time will have to be quicker than the average local joinery shop, and our production costs will have to be much lower to more than offset our higher delivery costs. The new brand: going for growth 'Even with our somewhat limited cellular production system, I knew that we should start marketing our capability, and so we have branded this business "Pear Stairs", with an eye-catching new logo provided by a local image consultant, who also prepared an excellent new brochure. Our regional marketing campaign has already brought in a high level of enquiries, most of which are for special staircases, with delivery often required very quickly, often in less than two weeks. It is increasingly apparent that there is a huge opportunity to roll out our capability over an expanding geographical area, only limited by our ability to continue to supply quickly. I am now even more certain that we will need to mechanise some or all of the time-consuming processes, from design to final assembly. 'During our first year of running the cell, our monthly turnover of staircases has doubled from around £4000 to £8000, and is now only constrained by capacity. The monthly management accounts indicate that our staircases are now very profitable. Even within the local trading area (mostly agricultural and small market towns, with low population density, covering a radius of about 80 kilometres) demand seems to greatly exceed supply, and we are in effect limiting sales by quoting fairly long lead-times and high prices. If we could double turnover so easily, there is surely good potential to broaden our area to take in some larger centres of population, but only if we could increase our capacity substantially. The time is now right for deciding whether to invest in a state-of-the-art technology. CAD/CAM 'The system we have devised includes computer-aided design (CAD) and computer-aided manufacturing (CAM). No single firm supplies both for this type of joinery product, so we will have to take responsibility for linking the two systems. We have identified the best supplier of CAD systems for special stairs, and have already ordered a two-workstation system, so that we can begin trials of this as soon as possible. Even if we decide not to go ahead with the manufacturing system, we can continue to supply joinery design services using this new design technology. The digital output of the CAD is adaptable to the input requirements of the proposed CAM. This initial CAD system will cost us around £15000 for hardware and software. But the really big decision concerns the CAM system, which will cost in the order of £240 000, the single largest investment ever made in this small business! Everybody thinks I'm mad even contemplating it, but we have already prepared a business case for raising the money, and our bank manager has agreed to support this radical innovation. In practice, the bank's risk is relatively low, since the loan would be secured on our real estate, and for that reason we have been able to agree a very low interest rate. The shareholders (this is a family business) are supportive in principle, but a Boys and Boden (B) 197 little nervous, I think! This could be a make-or-break decision not only for the future of joinery manufacture within the company, but also of the company itself! 'In my view, the future of any generalist joinery job shop is under threat anyway. Already, window specialists have acquired the processes and technology to make bespoke windows efficiently, and the same is happening with doors. That will take volume away from the thousands of small joinery businesses that make a wide variety of "specials", threatening their very survival. This trend will be compounded and acceler- ated by the scarcity of trained joiners in this country! Eventually, specialisation and technology will displace the slow and inefficient traditional generalist craftsmen. There is a real window of opportunity here to be the first to adopt these technologies for staircases and there will be first-mover advantages, so we need to get this underway as soon as possible. The technology is extremely precise - positional accuracy is better than one-tenth of a millimetre for every cut, which is an order of magnitude better than can consistently be achieved by skilled joiners. This means we can get very accurate and tight joints, and, hopefully, the elimination of mistakes where drawings are misread! This CAD/CAM technology could actually be used to machine virtually any joinery compo- nents, but I feel that we simply must not be distracted by this capability. We want to specialise just in stairs, and therefore should not get into making windows, doors or any other special products, even in quiet periods. This is a strategic issue if you believe in the benefits of focus, you mustn't get distracted from focus!' The proposed design process 'On receipt of customers' orders, their sketches and any other forms of information sup- plied by the customer detailing their requirements will be delivered to the small design office. Here, the two CAD designers will extract the dimensions and apply them to the CAD staircase templates held on the system. Trials indicate that this will be a relatively quick process, taking between half an hour and two hours depending on the complexity of the design. Thus a detailed drawing of the whole staircase can be produced very quickly, and a copy can then be sent back to the customer for their confirmation. The system holds all the details on each staircase, so that when confirmation and approval is received, the details can be immediately passed electronically to the CAM system. In theory, it should be possible to e-mail the drawings to a customer, but at present most builders prefer paper and many sites do not even have faxes! It will be a few years before we can link electronically to both the buyers and the site managers of even the larger builders. Smaller builders may never adopt this technology. The proposed manufacturing process 'Briefly, the process will work something like this: one of the factory team workers will select and prepare the pre-planed timber for all the components to be produced for a staircase, working from a detailed cutting list and drawings supplied by the CAD system. This will involve him selecting planed timber from stock, cutting it to length, and some- times gluing pieces together. He will then pass these components through a sanding machine. He will continue until a full set of pieces is ready on a trolley. This "kit" of materials will then wait in a small buffer area prior to being machined on the CAM. 198 Part 3 Design 'The CAM operator will then carefully position each piece of timber in turn on an adjustable vacuum clamping device forming part of the bed of the CAM machine. Precise alignment will be facilitated by a laser light outline projected from the ceiling, corresponding to the staircase and component reference stored in the CAM server. The operator then will initiate the automatic machining of the components. The CAM machine will select appropriate tooling from its own tooling "library" and will complete the entire machining of the component with no further operator involvement. In the meantime, the operator will be able to position the next component on the opposite end of the CAM bed, and also clean away the wood chippings and sawdust at that end. In this way it should be possible to virtually eliminate set-up time. The machined com- ponent will then be unclamped from the bed and placed on another trolley; when filled, this will be taken to the assembly area. Every component of a staircase can be prepared in this way, including handrails, treads, risers, newels, etc. No setting-out will be required, saving enormous amounts of time. For example, a very complex string will take only about five minutes to machine; whereas a skilled joiner might take several hours just to mark out such a component, followed by up to a day using hand tools to cut the various features. 'The other three workers on each shift will be responsible for assembly and packing. Additional special clamping tables will be purchased which facilitate accurate assembly of all the components. Most of the assembly work involves gluing and wedging, but some components will be nailed or stapled using compressed-air-driven hand tools. Finally, the completed staircase will be lightly sanded, inspected and packed as a builder's kit ready for despatch. Where separate components will be assembled on-site, an additional step will include trial assembly within our factory. None of the workers will be traditionally skilled joiners, but will be newly trained to do these specific jobs. Both of the existing skilled joiners in the staircase cell are being trained as CAD opera- tors, which is where we expect them to work when the new machine is installed. 'By keeping the components on a limited number of trolleys between each stage of production, we can limit work-in-progress. This should keep the cell tidy and orderly, eliminating damage and shortages. It will also ensure quicker throughput times, sup- porting the short delivery lead-times required by many of our new customers.' Developing a business plan 'I have set up a working party to fine-tune the business plan for this project, prior to agreeing the loan conditions and ordering the machinery. We have contracted out a limited piece of market research to confirm the prospects for serving national builders and merchants. This indicates that there is a vast market for specials in the UK - far in excess of our capacity. Our UK market share would in fact be quite low, and our pro- posed differentiation based on delivery speed is confirmed as an important criterion in this market. We have therefore projected volumes growing to £50 000 per month by the end of Year 1. This represents sales of approximately 100 stairs, or around four or five per working day. I am quite confident that we can easily achieve this level before the end of 2000, given our experiences to date, so subsequent years should easily reach the forecast sales shown on the spreadsheet. 'Regarding costs, we have had to make a number of broad assumptions. Since this technology has never before been used to make staircases, the actual output speeds can Boys and Boden (B) 199 only be based on estimates derived from the CAM supplier's experience with much smaller timber components. Therefore, we have had to make all such estimates relatively pessimistic - "playing safe". In that way, if the system performs better than expectations, the breakeven point will be lower and the profit even higher. The detailed times per component and per staircase indicate that the breakeven output could easily be achieved by two teams of five operatives, working two shifts. This will be the first time we have used two-shift working, so we will undoubtedly experience some unforeseen problems. I have asked our accountant to prepare budgets for the first four years of the system [see Appendix 18.2], which clearly indicate that excellent profits should be achieved when we can reach the forecast 2003 sales of £80 000 per month. The entire team has endorsed my view that we should actually achieve this level before the end of 2002! 'So...this is not only a strategic investment which will ensure our future in bespoke joinery, but it will also give outstanding returns and positive cash flow after the learning period of Year 1! What do you think - have we missed anything? Do you agree that we should go ahead?' Questions 1 Evaluate the proposed CAD/CAM system in terms of its contribution to each of the five operations performance objectives. In doing this, you could make com- parisons between the existing and proposed system. 2 Analyse the degree of automation inherent in the proposed system. What other process elements could be automated, and what are unlikely ever to be auto- mated? Explain your rationale. 3 Is there any evidence that the CAM technology could be purchased at a smaller scale? and if so, why has Dean not considered that option? Is the proposed scale too biglambitious a change from the existing jobbing processes? 4 Where is there any integration between technologies? What risks will there be at this interface(s), and how could these be minimised? This case study should only be used after Boys and Boden (A) which gives back- ground information on the business and on the issues involved in setting up the cellular manufacturing system for special staircases. Cellular production The staircase cell had been a great success! In well under a year, the company had established an enviable reputation for high quality, quick delivery and very compet- itive prices. The best production configuration had proved to be a rectangular area of the factory, equipped with a full set of the requisite machinery (bench-saw, planer-thick- nesser, spindle moulder, tenoning machines, surface sander, assembly benches, etc.) and two skilled joiners (carpenters). They worked well together and their productivity was dramatically higher than had ever been seen in the job shop environment. As a result of the increased competitiveness, volume was increasing, but attempts to use three men had proved unsatisfactory. Given the limited space available, they seemed to be getting in each other's way, and productivity fell, reducing the benefits of cellu- lar manufacturing which had been found in the earlier months of the experiment. There was always a feeling that 'two's company and three's a crowd', as the two- person cell seemed to work as a better team than three. Dean Hammond, General Manager of Boys and Boden (B&B), reflected on their experience of changing the staircase production system: 'This has been one big learning experience for us all! We knew what machinery we would need, but it was not at all clear in advance how much space would be used pro- ductively and how the men would take to more repetitive work. Hardly any of their staircases are identical, but they do only make staircases, whereas before they would have moved on to windows, doors, and all sorts of other special items required by a mul- titude of customers. In practice we should not have worried, since the two men immediately took responsibility for their work area, sorted things out, and developed a pride in their specialised work. 'With only one cell, our output was clearly limited, so we began to think about adding a second identical cell. This would certainly introduce an element of competi- tion, which could have a positive impact on productivity and quality. However, we felt that this was not really the only way of expanding capacity. Perhaps there were ways of 196 introducing technology to simplify all the manufacture of these specialised staircases. In fact, this seemed to be one of the few industries left where most of the technologies. had changed very little during the micro-electronics revolution. Making specialised join- ery remains the domain of a diminishing number of highly skilled craftsmen, and the number of good quality apprenticeships had declined dramatically over the last 20 years. I knew we had to rethink what we were doing, and I knew this was an opportunity to focus on high-value-added products with relatively certain levels of future volume. 'For each job, the joiners start by "setting out" the strings (the long sides of a stair- case), drawing at full scale the overall shape and positions of cuts and grooves to be made in the wood. They get the required information from detailed drawings included. with the production specification. This specification is sometimes provided by the cus- tomer, but more often is prepared in the drawing office here. The setting out is a very time-consuming step, taking up to two days for all the components of a really complex staircase, for example, a flight of stairs which turns through 90 or more degrees, known as a "winder". The selling price of large, complex staircases can be very high, but the work content is correspondingly large, so our margins are not always that great!" The seed of an idea.... 'Whilst watching the staircases being made, I came to realise that the men were, in effect, duplicating. work done in a drawing office the data is same, but scaled. up from the drawings. If we were to grow this business, we would need to find ways of increasing the overall productivity of the system. We knew that there should be a way of getting the data directly transferred to the wood, and I know this has been achieved in many industries using CAD/CAM, so a few months ago I started investigating the possi- bility of purchasing suitable systems. There are several reputable manufacturers that make large computer-aided manufacturing (CAM) machining centres for use in the metals industry, but there appears to be only a few specifically developed for the wood- working industry. I then identified one German supplier that can modify and enlarge one of its largest machines for our application, but there will be an element of experi- mentation and innovation involved here. They do have some experience with wood machining, but only for small components. Our staircase strings are up to five metres long! By the time the clamping tables have been extended, this will be an extremely expensive piece of equipment! 'It is clear that there are a few very large manufacturers of staircases in the UK, but they specialise in standard sizes which are sold in huge quantities to large builders and merchants. They are, in effect, making commodities and their manufacturing systems are designed to make large batches of standard components, which are then assembled on production lines. It is clear that we will never be able to compete profitably in this. part of the market. However, an increasing number of house builders are using stair- cases as an attractive feature of hallways, and some of these require more complex shapes (including winders) and better finishes [an example is shown Appendix 18.1]. In addition, refurbishment of existing houses often requires the installation of special staircases designed to fit into awkward spaces, and with non-standard heights. There is also increasing demand for expensive feature hardwoods such as oak and beech, which are not usually mass-produced. These changes are providing an opportunity for us to Part 3 Design become a specialist, not just serving our local area, but providing non-standard stair- cases throughout the country. For this to be competitive, our quality will have to be excellent, our delivery time will have to be quicker than the average local joinery shop, and our production costs will have to be much lower to more than offset our higher delivery costs. The new brand: going for growth 'Even with our somewhat limited cellular production system, I knew that we should start marketing our capability, and so we have branded this business "Pear Stairs", with an eye-catching new logo provided by a local image consultant, who also prepared an excellent new brochure. Our regional marketing campaign has already brought in a high level of enquiries, most of which are for special staircases, with delivery often required very quickly, often in less than two weeks. It is increasingly apparent that there is a huge opportunity to roll out our capability over an expanding geographical area, only limited by our ability to continue to supply quickly. I am now even more certain that we will need to mechanise some or all of the time-consuming processes, from design to final assembly. 'During our first year of running the cell, our monthly turnover of staircases has doubled from around £4000 to £8000, and is now only constrained by capacity. The monthly management accounts indicate that our staircases are now very profitable. Even within the local trading area (mostly agricultural and small market towns, with low population density, covering a radius of about 80 kilometres) demand seems to greatly exceed supply, and we are in effect limiting sales by quoting fairly long lead-times and high prices. If we could double turnover so easily, there is surely good potential to broaden our area to take in some larger centres of population, but only if we could increase our capacity substantially. The time is now right for deciding whether to invest in a state-of-the-art technology. CAD/CAM 'The system we have devised includes computer-aided design (CAD) and computer-aided manufacturing (CAM). No single firm supplies both for this type of joinery product, so we will have to take responsibility for linking the two systems. We have identified the best supplier of CAD systems for special stairs, and have already ordered a two-workstation system, so that we can begin trials of this as soon as possible. Even if we decide not to go ahead with the manufacturing system, we can continue to supply joinery design services using this new design technology. The digital output of the CAD is adaptable to the input requirements of the proposed CAM. This initial CAD system will cost us around £15000 for hardware and software. But the really big decision concerns the CAM system, which will cost in the order of £240 000, the single largest investment ever made in this small business! Everybody thinks I'm mad even contemplating it, but we have already prepared a business case for raising the money, and our bank manager has agreed to support this radical innovation. In practice, the bank's risk is relatively low, since the loan would be secured on our real estate, and for that reason we have been able to agree a very low interest rate. The shareholders (this is a family business) are supportive in principle, but a Boys and Boden (B) 197 little nervous, I think! This could be a make-or-break decision not only for the future of joinery manufacture within the company, but also of the company itself! 'In my view, the future of any generalist joinery job shop is under threat anyway. Already, window specialists have acquired the processes and technology to make bespoke windows efficiently, and the same is happening with doors. That will take volume away from the thousands of small joinery businesses that make a wide variety of "specials", threatening their very survival. This trend will be compounded and acceler- ated by the scarcity of trained joiners in this country! Eventually, specialisation and technology will displace the slow and inefficient traditional generalist craftsmen. There is a real window of opportunity here to be the first to adopt these technologies for staircases and there will be first-mover advantages, so we need to get this underway as soon as possible. The technology is extremely precise - positional accuracy is better than one-tenth of a millimetre for every cut, which is an order of magnitude better than can consistently be achieved by skilled joiners. This means we can get very accurate and tight joints, and, hopefully, the elimination of mistakes where drawings are misread! This CAD/CAM technology could actually be used to machine virtually any joinery compo- nents, but I feel that we simply must not be distracted by this capability. We want to specialise just in stairs, and therefore should not get into making windows, doors or any other special products, even in quiet periods. This is a strategic issue if you believe in the benefits of focus, you mustn't get distracted from focus!' The proposed design process 'On receipt of customers' orders, their sketches and any other forms of information sup- plied by the customer detailing their requirements will be delivered to the small design office. Here, the two CAD designers will extract the dimensions and apply them to the CAD staircase templates held on the system. Trials indicate that this will be a relatively quick process, taking between half an hour and two hours depending on the complexity of the design. Thus a detailed drawing of the whole staircase can be produced very quickly, and a copy can then be sent back to the customer for their confirmation. The system holds all the details on each staircase, so that when confirmation and approval is received, the details can be immediately passed electronically to the CAM system. In theory, it should be possible to e-mail the drawings to a customer, but at present most builders prefer paper and many sites do not even have faxes! It will be a few years before we can link electronically to both the buyers and the site managers of even the larger builders. Smaller builders may never adopt this technology. The proposed manufacturing process 'Briefly, the process will work something like this: one of the factory team workers will select and prepare the pre-planed timber for all the components to be produced for a staircase, working from a detailed cutting list and drawings supplied by the CAD system. This will involve him selecting planed timber from stock, cutting it to length, and some- times gluing pieces together. He will then pass these components through a sanding machine. He will continue until a full set of pieces is ready on a trolley. This "kit" of materials will then wait in a small buffer area prior to being machined on the CAM. 198 Part 3 Design 'The CAM operator will then carefully position each piece of timber in turn on an adjustable vacuum clamping device forming part of the bed of the CAM machine. Precise alignment will be facilitated by a laser light outline projected from the ceiling, corresponding to the staircase and component reference stored in the CAM server. The operator then will initiate the automatic machining of the components. The CAM machine will select appropriate tooling from its own tooling "library" and will complete the entire machining of the component with no further operator involvement. In the meantime, the operator will be able to position the next component on the opposite end of the CAM bed, and also clean away the wood chippings and sawdust at that end. In this way it should be possible to virtually eliminate set-up time. The machined com- ponent will then be unclamped from the bed and placed on another trolley; when filled, this will be taken to the assembly area. Every component of a staircase can be prepared in this way, including handrails, treads, risers, newels, etc. No setting-out will be required, saving enormous amounts of time. For example, a very complex string will take only about five minutes to machine; whereas a skilled joiner might take several hours just to mark out such a component, followed by up to a day using hand tools to cut the various features. 'The other three workers on each shift will be responsible for assembly and packing. Additional special clamping tables will be purchased which facilitate accurate assembly of all the components. Most of the assembly work involves gluing and wedging, but some components will be nailed or stapled using compressed-air-driven hand tools. Finally, the completed staircase will be lightly sanded, inspected and packed as a builder's kit ready for despatch. Where separate components will be assembled on-site, an additional step will include trial assembly within our factory. None of the workers will be traditionally skilled joiners, but will be newly trained to do these specific jobs. Both of the existing skilled joiners in the staircase cell are being trained as CAD opera- tors, which is where we expect them to work when the new machine is installed. 'By keeping the components on a limited number of trolleys between each stage of production, we can limit work-in-progress. This should keep the cell tidy and orderly, eliminating damage and shortages. It will also ensure quicker throughput times, sup- porting the short delivery lead-times required by many of our new customers.' Developing a business plan 'I have set up a working party to fine-tune the business plan for this project, prior to agreeing the loan conditions and ordering the machinery. We have contracted out a limited piece of market research to confirm the prospects for serving national builders and merchants. This indicates that there is a vast market for specials in the UK - far in excess of our capacity. Our UK market share would in fact be quite low, and our pro- posed differentiation based on delivery speed is confirmed as an important criterion in this market. We have therefore projected volumes growing to £50 000 per month by the end of Year 1. This represents sales of approximately 100 stairs, or around four or five per working day. I am quite confident that we can easily achieve this level before the end of 2000, given our experiences to date, so subsequent years should easily reach the forecast sales shown on the spreadsheet. 'Regarding costs, we have had to make a number of broad assumptions. Since this technology has never before been used to make staircases, the actual output speeds can Boys and Boden (B) 199 only be based on estimates derived from the CAM supplier's experience with much smaller timber components. Therefore, we have had to make all such estimates relatively pessimistic - "playing safe". In that way, if the system performs better than expectations, the breakeven point will be lower and the profit even higher. The detailed times per component and per staircase indicate that the breakeven output could easily be achieved by two teams of five operatives, working two shifts. This will be the first time we have used two-shift working, so we will undoubtedly experience some unforeseen problems. I have asked our accountant to prepare budgets for the first four years of the system [see Appendix 18.2], which clearly indicate that excellent profits should be achieved when we can reach the forecast 2003 sales of £80 000 per month. The entire team has endorsed my view that we should actually achieve this level before the end of 2002! 'So...this is not only a strategic investment which will ensure our future in bespoke joinery, but it will also give outstanding returns and positive cash flow after the learning period of Year 1! What do you think - have we missed anything? Do you agree that we should go ahead?' Questions 1 Evaluate the proposed CAD/CAM system in terms of its contribution to each of the five operations performance objectives. In doing this, you could make com- parisons between the existing and proposed system. 2 Analyse the degree of automation inherent in the proposed system. What other process elements could be automated, and what are unlikely ever to be auto- mated? Explain your rationale. 3 Is there any evidence that the CAM technology could be purchased at a smaller scale? and if so, why has Dean not considered that option? Is the proposed scale too biglambitious a change from the existing jobbing processes? 4 Where is there any integration between technologies? What risks will there be at this interface(s), and how could these be minimised? This case study should only be used after Boys and Boden (A) which gives back- ground information on the business and on the issues involved in setting up the cellular manufacturing system for special staircases. Cellular production The staircase cell had been a great success! In well under a year, the company had established an enviable reputation for high quality, quick delivery and very compet- itive prices. The best production configuration had proved to be a rectangular area of the factory, equipped with a full set of the requisite machinery (bench-saw, planer-thick- nesser, spindle moulder, tenoning machines, surface sander, assembly benches, etc.) and two skilled joiners (carpenters). They worked well together and their productivity was dramatically higher than had ever been seen in the job shop environment. As a result of the increased competitiveness, volume was increasing, but attempts to use three men had proved unsatisfactory. Given the limited space available, they seemed to be getting in each other's way, and productivity fell, reducing the benefits of cellu- lar manufacturing which had been found in the earlier months of the experiment. There was always a feeling that 'two's company and three's a crowd', as the two- person cell seemed to work as a better team than three. Dean Hammond, General Manager of Boys and Boden (B&B), reflected on their experience of changing the staircase production system: 'This has been one big learning experience for us all! We knew what machinery we would need, but it was not at all clear in advance how much space would be used pro- ductively and how the men would take to more repetitive work. Hardly any of their staircases are identical, but they do only make staircases, whereas before they would have moved on to windows, doors, and all sorts of other special items required by a mul- titude of customers. In practice we should not have worried, since the two men immediately took responsibility for their work area, sorted things out, and developed a pride in their specialised work. 'With only one cell, our output was clearly limited, so we began to think about adding a second identical cell. This would certainly introduce an element of competi- tion, which could have a positive impact on productivity and quality. However, we felt that this was not really the only way of expanding capacity. Perhaps there were ways of 196 introducing technology to simplify all the manufacture of these specialised staircases. In fact, this seemed to be one of the few industries left where most of the technologies. had changed very little during the micro-electronics revolution. Making specialised join- ery remains the domain of a diminishing number of highly skilled craftsmen, and the number of good quality apprenticeships had declined dramatically over the last 20 years. I knew we had to rethink what we were doing, and I knew this was an opportunity to focus on high-value-added products with relatively certain levels of future volume. 'For each job, the joiners start by "setting out" the strings (the long sides of a stair- case), drawing at full scale the overall shape and positions of cuts and grooves to be made in the wood. They get the required information from detailed drawings included. with the production specification. This specification is sometimes provided by the cus- tomer, but more often is prepared in the drawing office here. The setting out is a very time-consuming step, taking up to two days for all the components of a really complex staircase, for example, a flight of stairs which turns through 90 or more degrees, known as a "winder". The selling price of large, complex staircases can be very high, but the work content is correspondingly large, so our margins are not always that great!" The seed of an idea.... 'Whilst watching the staircases being made, I came to realise that the men were, in effect, duplicating. work done in a drawing office the data is same, but scaled. up from the drawings. If we were to grow this business, we would need to find ways of increasing the overall productivity of the system. We knew that there should be a way of getting the data directly transferred to the wood, and I know this has been achieved in many industries using CAD/CAM, so a few months ago I started investigating the possi- bility of purchasing suitable systems. There are several reputable manufacturers that make large computer-aided manufacturing (CAM) machining centres for use in the metals industry, but there appears to be only a few specifically developed for the wood- working industry. I then identified one German supplier that can modify and enlarge one of its largest machines for our application, but there will be an element of experi- mentation and innovation involved here. They do have some experience with wood machining, but only for small components. Our staircase strings are up to five metres long! By the time the clamping tables have been extended, this will be an extremely expensive piece of equipment! 'It is clear that there are a few very large manufacturers of staircases in the UK, but they specialise in standard sizes which are sold in huge quantities to large builders and merchants. They are, in effect, making commodities and their manufacturing systems are designed to make large batches of standard components, which are then assembled on production lines. It is clear that we will never be able to compete profitably in this. part of the market. However, an increasing number of house builders are using stair- cases as an attractive feature of hallways, and some of these require more complex shapes (including winders) and better finishes [an example is shown Appendix 18.1]. In addition, refurbishment of existing houses often requires the installation of special staircases designed to fit into awkward spaces, and with non-standard heights. There is also increasing demand for expensive feature hardwoods such as oak and beech, which are not usually mass-produced. These changes are providing an opportunity for us to Part 3 Design become a specialist, not just serving our local area, but providing non-standard stair- cases throughout the country. For this to be competitive, our quality will have to be excellent, our delivery time will have to be quicker than the average local joinery shop, and our production costs will have to be much lower to more than offset our higher delivery costs. The new brand: going for growth 'Even with our somewhat limited cellular production system, I knew that we should start marketing our capability, and so we have branded this business "Pear Stairs", with an eye-catching new logo provided by a local image consultant, who also prepared an excellent new brochure. Our regional marketing campaign has already brought in a high level of enquiries, most of which are for special staircases, with delivery often required very quickly, often in less than two weeks. It is increasingly apparent that there is a huge opportunity to roll out our capability over an expanding geographical area, only limited by our ability to continue to supply quickly. I am now even more certain that we will need to mechanise some or all of the time-consuming processes, from design to final assembly. 'During our first year of running the cell, our monthly turnover of staircases has doubled from around £4000 to £8000, and is now only constrained by capacity. The monthly management accounts indicate that our staircases are now very profitable. Even within the local trading area (mostly agricultural and small market towns, with low population density, covering a radius of about 80 kilometres) demand seems to greatly exceed supply, and we are in effect limiting sales by quoting fairly long lead-times and high prices. If we could double turnover so easily, there is surely good potential to broaden our area to take in some larger centres of population, but only if we could increase our capacity substantially. The time is now right for deciding whether to invest in a state-of-the-art technology. CAD/CAM 'The system we have devised includes computer-aided design (CAD) and computer-aided manufacturing (CAM). No single firm supplies both for this type of joinery product, so we will have to take responsibility for linking the two systems. We have identified the best supplier of CAD systems for special stairs, and have already ordered a two-workstation system, so that we can begin trials of this as soon as possible. Even if we decide not to go ahead with the manufacturing system, we can continue to supply joinery design services using this new design technology. The digital output of the CAD is adaptable to the input requirements of the proposed CAM. This initial CAD system will cost us around £15000 for hardware and software. But the really big decision concerns the CAM system, which will cost in the order of £240 000, the single largest investment ever made in this small business! Everybody thinks I'm mad even contemplating it, but we have already prepared a business case for raising the money, and our bank manager has agreed to support this radical innovation. In practice, the bank's risk is relatively low, since the loan would be secured on our real estate, and for that reason we have been able to agree a very low interest rate. The shareholders (this is a family business) are supportive in principle, but a Boys and Boden (B) 197 little nervous, I think! This could be a make-or-break decision not only for the future of joinery manufacture within the company, but also of the company itself! 'In my view, the future of any generalist joinery job shop is under threat anyway. Already, window specialists have acquired the processes and technology to make bespoke windows efficiently, and the same is happening with doors. That will take volume away from the thousands of small joinery businesses that make a wide variety of "specials", threatening their very survival. This trend will be compounded and acceler- ated by the scarcity of trained joiners in this country! Eventually, specialisation and technology will displace the slow and inefficient traditional generalist craftsmen. There is a real window of opportunity here to be the first to adopt these technologies for staircases and there will be first-mover advantages, so we need to get this underway as soon as possible. The technology is extremely precise - positional accuracy is better than one-tenth of a millimetre for every cut, which is an order of magnitude better than can consistently be achieved by skilled joiners. This means we can get very accurate and tight joints, and, hopefully, the elimination of mistakes where drawings are misread! This CAD/CAM technology could actually be used to machine virtually any joinery compo- nents, but I feel that we simply must not be distracted by this capability. We want to specialise just in stairs, and therefore should not get into making windows, doors or any other special products, even in quiet periods. This is a strategic issue if you believe in the benefits of focus, you mustn't get distracted from focus!' The proposed design process 'On receipt of customers' orders, their sketches and any other forms of information sup- plied by the customer detailing their requirements will be delivered to the small design office. Here, the two CAD designers will extract the dimensions and apply them to the CAD staircase templates held on the system. Trials indicate that this will be a relatively quick process, taking between half an hour and two hours depending on the complexity of the design. Thus a detailed drawing of the whole staircase can be produced very quickly, and a copy can then be sent back to the customer for their confirmation. The system holds all the details on each staircase, so that when confirmation and approval is received, the details can be immediately passed electronically to the CAM system. In theory, it should be possible to e-mail the drawings to a customer, but at present most builders prefer paper and many sites do not even have faxes! It will be a few years before we can link electronically to both the buyers and the site managers of even the larger builders. Smaller builders may never adopt this technology. The proposed manufacturing process 'Briefly, the process will work something like this: one of the factory team workers will select and prepare the pre-planed timber for all the components to be produced for a staircase, working from a detailed cutting list and drawings supplied by the CAD system. This will involve him selecting planed timber from stock, cutting it to length, and some- times gluing pieces together. He will then pass these components through a sanding machine. He will continue until a full set of pieces is ready on a trolley. This "kit" of materials will then wait in a small buffer area prior to being machined on the CAM. 198 Part 3 Design 'The CAM operator will then carefully position each piece of timber in turn on an adjustable vacuum clamping device forming part of the bed of the CAM machine. Precise alignment will be facilitated by a laser light outline projected from the ceiling, corresponding to the staircase and component reference stored in the CAM server. The operator then will initiate the automatic machining of the components. The CAM machine will select appropriate tooling from its own tooling "library" and will complete the entire machining of the component with no further operator involvement. In the meantime, the operator will be able to position the next component on the opposite end of the CAM bed, and also clean away the wood chippings and sawdust at that end. In this way it should be possible to virtually eliminate set-up time. The machined com- ponent will then be unclamped from the bed and placed on another trolley; when filled, this will be taken to the assembly area. Every component of a staircase can be prepared in this way, including handrails, treads, risers, newels, etc. No setting-out will be required, saving enormous amounts of time. For example, a very complex string will take only about five minutes to machine; whereas a skilled joiner might take several hours just to mark out such a component, followed by up to a day using hand tools to cut the various features. 'The other three workers on each shift will be responsible for assembly and packing. Additional special clamping tables will be purchased which facilitate accurate assembly of all the components. Most of the assembly work involves gluing and wedging, but some components will be nailed or stapled using compressed-air-driven hand tools. Finally, the completed staircase will be lightly sanded, inspected and packed as a builder's kit ready for despatch. Where separate components will be assembled on-site, an additional step will include trial assembly within our factory. None of the workers will be traditionally skilled joiners, but will be newly trained to do these specific jobs. Both of the existing skilled joiners in the staircase cell are being trained as CAD opera- tors, which is where we expect them to work when the new machine is installed. 'By keeping the components on a limited number of trolleys between each stage of production, we can limit work-in-progress. This should keep the cell tidy and orderly, eliminating damage and shortages. It will also ensure quicker throughput times, sup- porting the short delivery lead-times required by many of our new customers.' Developing a business plan 'I have set up a working party to fine-tune the business plan for this project, prior to agreeing the loan conditions and ordering the machinery. We have contracted out a limited piece of market research to confirm the prospects for serving national builders and merchants. This indicates that there is a vast market for specials in the UK - far in excess of our capacity. Our UK market share would in fact be quite low, and our pro- posed differentiation based on delivery speed is confirmed as an important criterion in this market. We have therefore projected volumes growing to £50 000 per month by the end of Year 1. This represents sales of approximately 100 stairs, or around four or five per working day. I am quite confident that we can easily achieve this level before the end of 2000, given our experiences to date, so subsequent years should easily reach the forecast sales shown on the spreadsheet. 'Regarding costs, we have had to make a number of broad assumptions. Since this technology has never before been used to make staircases, the actual output speeds can Boys and Boden (B) 199 only be based on estimates derived from the CAM supplier's experience with much smaller timber components. Therefore, we have had to make all such estimates relatively pessimistic - "playing safe". In that way, if the system performs better than expectations, the breakeven point will be lower and the profit even higher. The detailed times per component and per staircase indicate that the breakeven output could easily be achieved by two teams of five operatives, working two shifts. This will be the first time we have used two-shift working, so we will undoubtedly experience some unforeseen problems. I have asked our accountant to prepare budgets for the first four years of the system [see Appendix 18.2], which clearly indicate that excellent profits should be achieved when we can reach the forecast 2003 sales of £80 000 per month. The entire team has endorsed my view that we should actually achieve this level before the end of 2002! 'So...this is not only a strategic investment which will ensure our future in bespoke joinery, but it will also give outstanding returns and positive cash flow after the learning period of Year 1! What do you think - have we missed anything? Do you agree that we should go ahead?' Questions 1 Evaluate the proposed CAD/CAM system in terms of its contribution to each of the five operations performance objectives. In doing this, you could make com- parisons between the existing and proposed system. 2 Analyse the degree of automation inherent in the proposed system. What other process elements could be automated, and what are unlikely ever to be auto- mated? Explain your rationale. 3 Is there any evidence that the CAM technology could be purchased at a smaller scale? and if so, why has Dean not considered that option? Is the proposed scale too biglambitious a change from the existing jobbing processes? 4 Where is there any integration between technologies? What risks will there be at this interface(s), and how could these be minimised? This case study should only be used after Boys and Boden (A) which gives back- ground information on the business and on the issues involved in setting up the cellular manufacturing system for special staircases. Cellular production The staircase cell had been a great success! In well under a year, the company had established an enviable reputation for high quality, quick delivery and very compet- itive prices. The best production configuration had proved to be a rectangular area of the factory, equipped with a full set of the requisite machinery (bench-saw, planer-thick- nesser, spindle moulder, tenoning machines, surface sander, assembly benches, etc.) and two skilled joiners (carpenters). They worked well together and their productivity was dramatically higher than had ever been seen in the job shop environment. As a result of the increased competitiveness, volume was increasing, but attempts to use three men had proved unsatisfactory. Given the limited space available, they seemed to be getting in each other's way, and productivity fell, reducing the benefits of cellu- lar manufacturing which had been found in the earlier months of the experiment. There was always a feeling that 'two's company and three's a crowd', as the two- person cell seemed to work as a better team than three. Dean Hammond, General Manager of Boys and Boden (B&B), reflected on their experience of changing the staircase production system: 'This has been one big learning experience for us all! We knew what machinery we would need, but it was not at all clear in advance how much space would be used pro- ductively and how the men would take to more repetitive work. Hardly any of their staircases are identical, but they do only make staircases, whereas before they would have moved on to windows, doors, and all sorts of other special items required by a mul- titude of customers. In practice we should not have worried, since the two men immediately took responsibility for their work area, sorted things out, and developed a pride in their specialised work. 'With only one cell, our output was clearly limited, so we began to think about adding a second identical cell. This would certainly introduce an element of competi- tion, which could have a positive impact on productivity and quality. However, we felt that this was not really the only way of expanding capacity. Perhaps there were ways of 196 introducing technology to simplify all the manufacture of these specialised staircases. In fact, this seemed to be one of the few industries left where most of the technologies. had changed very little during the micro-electronics revolution. Making specialised join- ery remains the domain of a diminishing number of highly skilled craftsmen, and the number of good quality apprenticeships had declined dramatically over the last 20 years. I knew we had to rethink what we were doing, and I knew this was an opportunity to focus on high-value-added products with relatively certain levels of future volume. 'For each job, the joiners start by "setting out" the strings (the long sides of a stair- case), drawing at full scale the overall shape and positions of cuts and grooves to be made in the wood. They get the required information from detailed drawings included. with the production specification. This specification is sometimes provided by the cus- tomer, but more often is prepared in the drawing office here. The setting out is a very time-consuming step, taking up to two days for all the components of a really complex staircase, for example, a flight of stairs which turns through 90 or more degrees, known as a "winder". The selling price of large, complex staircases can be very high, but the work content is correspondingly large, so our margins are not always that great!" The seed of an idea.... 'Whilst watching the staircases being made, I came to realise that the men were, in effect, duplicating. work done in a drawing office the data is same, but scaled. up from the drawings. If we were to grow this business, we would need to find ways of increasing the overall productivity of the system. We knew that there should be a way of getting the data directly transferred to the wood, and I know this has been achieved in many industries using CAD/CAM, so a few months ago I started investigating the possi- bility of purchasing suitable systems. There are several reputable manufacturers that make large computer-aided manufacturing (CAM) machining centres for use in the metals industry, but there appears to be only a few specifically developed for the wood- working industry. I then identified one German supplier that can modify and enlarge one of its largest machines for our application, but there will be an element of experi- mentation and innovation involved here. They do have some experience with wood machining, but only for small components. Our staircase strings are up to five metres long! By the time the clamping tables have been extended, this will be an extremely expensive piece of equipment! 'It is clear that there are a few very large manufacturers of staircases in the UK, but they specialise in standard sizes which are sold in huge quantities to large builders and merchants. They are, in effect, making commodities and their manufacturing systems are designed to make large batches of standard components, which are then assembled on production lines. It is clear that we will never be able to compete profitably in this. part of the market. However, an increasing number of house builders are using stair- cases as an attractive feature of hallways, and some of these require more complex shapes (including winders) and better finishes [an example is shown Appendix 18.1]. In addition, refurbishment of existing houses often requires the installation of special staircases designed to fit into awkward spaces, and with non-standard heights. There is also increasing demand for expensive feature hardwoods such as oak and beech, which are not usually mass-produced. These changes are providing an opportunity for us to Part 3 Design become a specialist, not just serving our local area, but providing non-standard stair- cases throughout the country. For this to be competitive, our quality will have to be excellent, our delivery time will have to be quicker than the average local joinery shop, and our production costs will have to be much lower to more than offset our higher delivery costs. The new brand: going for growth 'Even with our somewhat limited cellular production system, I knew that we should start marketing our capability, and so we have branded this business "Pear Stairs", with an eye-catching new logo provided by a local image consultant, who also prepared an excellent new brochure. Our regional marketing campaign has already brought in a high level of enquiries, most of which are for special staircases, with delivery often required very quickly, often in less than two weeks. It is increasingly apparent that there is a huge opportunity to roll out our capability over an expanding geographical area, only limited by our ability to continue to supply quickly. I am now even more certain that we will need to mechanise some or all of the time-consuming processes, from design to final assembly. 'During our first year of running the cell, our monthly turnover of staircases has doubled from around £4000 to £8000, and is now only constrained by capacity. The monthly management accounts indicate that our staircases are now very profitable. Even within the local trading area (mostly agricultural and small market towns, with low population density, covering a radius of about 80 kilometres) demand seems to greatly exceed supply, and we are in effect limiting sales by quoting fairly long lead-times and high prices. If we could double turnover so easily, there is surely good potential to broaden our area to take in some larger centres of population, but only if we could increase our capacity substantially. The time is now right for deciding whether to invest in a state-of-the-art technology. CAD/CAM 'The system we have devised includes computer-aided design (CAD) and computer-aided manufacturing (CAM). No single firm supplies both for this type of joinery product, so we will have to take responsibility for linking the two systems. We have identified the best supplier of CAD systems for special stairs, and have already ordered a two-workstation system, so that we can begin trials of this as soon as possible. Even if we decide not to go ahead with the manufacturing system, we can continue to supply joinery design services using this new design technology. The digital output of the CAD is adaptable to the input requirements of the proposed CAM. This initial CAD system will cost us around £15000 for hardware and software. But the really big decision concerns the CAM system, which will cost in the order of £240 000, the single largest investment ever made in this small business! Everybody thinks I'm mad even contemplating it, but we have already prepared a business case for raising the money, and our bank manager has agreed to support this radical innovation. In practice, the bank's risk is relatively low, since the loan would be secured on our real estate, and for that reason we have been able to agree a very low interest rate. The shareholders (this is a family business) are supportive in principle, but a Boys and Boden (B) 197 little nervous, I think! This could be a make-or-break decision not only for the future of joinery manufacture within the company, but also of the company itself! 'In my view, the future of any generalist joinery job shop is under threat anyway. Already, window specialists have acquired the processes and technology to make bespoke windows efficiently, and the same is happening with doors. That will take volume away from the thousands of small joinery businesses that make a wide variety of "specials", threatening their very survival. This trend will be compounded and acceler- ated by the scarcity of trained joiners in this country! Eventually, specialisation and technology will displace the slow and inefficient traditional generalist craftsmen. There is a real window of opportunity here to be the first to adopt these technologies for staircases and there will be first-mover advantages, so we need to get this underway as soon as possible. The technology is extremely precise - positional accuracy is better than one-tenth of a millimetre for every cut, which is an order of magnitude better than can consistently be achieved by skilled joiners. This means we can get very accurate and tight joints, and, hopefully, the elimination of mistakes where drawings are misread! This CAD/CAM technology could actually be used to machine virtually any joinery compo- nents, but I feel that we simply must not be distracted by this capability. We want to specialise just in stairs, and therefore should not get into making windows, doors or any other special products, even in quiet periods. This is a strategic issue if you believe in the benefits of focus, you mustn't get distracted from focus!' The proposed design process 'On receipt of customers' orders, their sketches and any other forms of information sup- plied by the customer detailing their requirements will be delivered to the small design office. Here, the two CAD designers will extract the dimensions and apply them to the CAD staircase templates held on the system. Trials indicate that this will be a relatively quick process, taking between half an hour and two hours depending on the complexity of the design. Thus a detailed drawing of the whole staircase can be produced very quickly, and a copy can then be sent back to the customer for their confirmation. The system holds all the details on each staircase, so that when confirmation and approval is received, the details can be immediately passed electronically to the CAM system. In theory, it should be possible to e-mail the drawings to a customer, but at present most builders prefer paper and many sites do not even have faxes! It will be a few years before we can link electronically to both the buyers and the site managers of even the larger builders. Smaller builders may never adopt this technology. The proposed manufacturing process 'Briefly, the process will work something like this: one of the factory team workers will select and prepare the pre-planed timber for all the components to be produced for a staircase, working from a detailed cutting list and drawings supplied by the CAD system. This will involve him selecting planed timber from stock, cutting it to length, and some- times gluing pieces together. He will then pass these components through a sanding machine. He will continue until a full set of pieces is ready on a trolley. This "kit" of materials will then wait in a small buffer area prior to being machined on the CAM. 198 Part 3 Design 'The CAM operator will then carefully position each piece of timber in turn on an adjustable vacuum clamping device forming part of the bed of the CAM machine. Precise alignment will be facilitated by a laser light outline projected from the ceiling, corresponding to the staircase and component reference stored in the CAM server. The operator then will initiate the automatic machining of the components. The CAM machine will select appropriate tooling from its own tooling "library" and will complete the entire machining of the component with no further operator involvement. In the meantime, the operator will be able to position the next component on the opposite end of the CAM bed, and also clean away the wood chippings and sawdust at that end. In this way it should be possible to virtually eliminate set-up time. The machined com- ponent will then be unclamped from the bed and placed on another trolley; when filled, this will be taken to the assembly area. Every component of a staircase can be prepared in this way, including handrails, treads, risers, newels, etc. No setting-out will be required, saving enormous amounts of time. For example, a very complex string will take only about five minutes to machine; whereas a skilled joiner might take several hours just to mark out such a component, followed by up to a day using hand tools to cut the various features. 'The other three workers on each shift will be responsible for assembly and packing. Additional special clamping tables will be purchased which facilitate accurate assembly of all the components. Most of the assembly work involves gluing and wedging, but some components will be nailed or stapled using compressed-air-driven hand tools. Finally, the completed staircase will be lightly sanded, inspected and packed as a builder's kit ready for despatch. Where separate components will be assembled on-site, an additional step will include trial assembly within our factory. None of the workers will be traditionally skilled joiners, but will be newly trained to do these specific jobs. Both of the existing skilled joiners in the staircase cell are being trained as CAD opera- tors, which is where we expect them to work when the new machine is installed. 'By keeping the components on a limited number of trolleys between each stage of production, we can limit work-in-progress. This should keep the cell tidy and orderly, eliminating damage and shortages. It will also ensure quicker throughput times, sup- porting the short delivery lead-times required by many of our new customers.' Developing a business plan 'I have set up a working party to fine-tune the business plan for this project, prior to agreeing the loan conditions and ordering the machinery. We have contracted out a limited piece of market research to confirm the prospects for serving national builders and merchants. This indicates that there is a vast market for specials in the UK - far in excess of our capacity. Our UK market share would in fact be quite low, and our pro- posed differentiation based on delivery speed is confirmed as an important criterion in this market. We have therefore projected volumes growing to £50 000 per month by the end of Year 1. This represents sales of approximately 100 stairs, or around four or five per working day. I am quite confident that we can easily achieve this level before the end of 2000, given our experiences to date, so subsequent years should easily reach the forecast sales shown on the spreadsheet. 'Regarding costs, we have had to make a number of broad assumptions. Since this technology has never before been used to make staircases, the actual output speeds can Boys and Boden (B) 199 only be based on estimates derived from the CAM supplier's experience with much smaller timber components. Therefore, we have had to make all such estimates relatively pessimistic - "playing safe". In that way, if the system performs better than expectations, the breakeven point will be lower and the profit even higher. The detailed times per component and per staircase indicate that the breakeven output could easily be achieved by two teams of five operatives, working two shifts. This will be the first time we have used two-shift working, so we will undoubtedly experience some unforeseen problems. I have asked our accountant to prepare budgets for the first four years of the system [see Appendix 18.2], which clearly indicate that excellent profits should be achieved when we can reach the forecast 2003 sales of £80 000 per month. The entire team has endorsed my view that we should actually achieve this level before the end of 2002! 'So...this is not only a strategic investment which will ensure our future in bespoke joinery, but it will also give outstanding returns and positive cash flow after the learning period of Year 1! What do you think - have we missed anything? Do you agree that we should go ahead?' Questions 1 Evaluate the proposed CAD/CAM system in terms of its contribution to each of the five operations performance objectives. In doing this, you could make com- parisons between the existing and proposed system. 2 Analyse the degree of automation inherent in the proposed system. What other process elements could be automated, and what are unlikely ever to be auto- mated? Explain your rationale. 3 Is there any evidence that the CAM technology could be purchased at a smaller scale? and if so, why has Dean not considered that option? Is the proposed scale too biglambitious a change from the existing jobbing processes? 4 Where is there any integration between technologies? What risks will there be at this interface(s), and how could these be minimised? This case study should only be used after Boys and Boden (A) which gives back- ground information on the business and on the issues involved in setting up the cellular manufacturing system for special staircases. Cellular production The staircase cell had been a great success! In well under a year, the company had established an enviable reputation for high quality, quick delivery and very compet- itive prices. The best production configuration had proved to be a rectangular area of the factory, equipped with a full set of the requisite machinery (bench-saw, planer-thick- nesser, spindle moulder, tenoning machines, surface sander, assembly benches, etc.) and two skilled joiners (carpenters). They worked well together and their productivity was dramatically higher than had ever been seen in the job shop environment. As a result of the increased competitiveness, volume was increasing, but attempts to use three men had proved unsatisfactory. Given the limited space available, they seemed to be getting in each other's way, and productivity fell, reducing the benefits of cellu- lar manufacturing which had been found in the earlier months of the experiment. There was always a feeling that 'two's company and three's a crowd', as the two- person cell seemed to work as a better team than three. Dean Hammond, General Manager of Boys and Boden (B&B), reflected on their experience of changing the staircase production system: 'This has been one big learning experience for us all! We knew what machinery we would need, but it was not at all clear in advance how much space would be used pro- ductively and how the men would take to more repetitive work. Hardly any of their staircases are identical, but they do only make staircases, whereas before they would have moved on to windows, doors, and all sorts of other special items required by a mul- titude of customers. In practice we should not have worried, since the two men immediately took responsibility for their work area, sorted things out, and developed a pride in their specialised work. 'With only one cell, our output was clearly limited, so we began to think about adding a second identical cell. This would certainly introduce an element of competi- tion, which could have a positive impact on productivity and quality. However, we felt that this was not really the only way of expanding capacity. Perhaps there were ways of 196 introducing technology to simplify all the manufacture of these specialised staircases. In fact, this seemed to be one of the few industries left where most of the technologies. had changed very little during the micro-electronics revolution. Making specialised join- ery remains the domain of a diminishing number of highly skilled craftsmen, and the number of good quality apprenticeships had declined dramatically over the last 20 years. I knew we had to rethink what we were doing, and I knew this was an opportunity to focus on high-value-added products with relatively certain levels of future volume. 'For each job, the joiners start by "setting out" the strings (the long sides of a stair- case), drawing at full scale the overall shape and positions of cuts and grooves to be made in the wood. They get the required information from detailed drawings included. with the production specification. This specification is sometimes provided by the cus- tomer, but more often is prepared in the drawing office here. The setting out is a very time-consuming step, taking up to two days for all the components of a really complex staircase, for example, a flight of stairs which turns through 90 or more degrees, known as a "winder". The selling price of large, complex staircases can be very high, but the work content is correspondingly large, so our margins are not always that great!" The seed of an idea.... 'Whilst watching the staircases being made, I came to realise that the men were, in effect, duplicating. work done in a drawing office the data is same, but scaled. up from the drawings. If we were to grow this business, we would need to find ways of increasing the overall productivity of the system. We knew that there should be a way of getting the data directly transferred to the wood, and I know this has been achieved in many industries using CAD/CAM, so a few months ago I started investigating the possi- bility of purchasing suitable systems. There are several reputable manufacturers that make large computer-aided manufacturing (CAM) machining centres for use in the metals industry, but there appears to be only a few specifically developed for the wood- working industry. I then identified one German supplier that can modify and enlarge one of its largest machines for our application, but there will be an element of experi- mentation and innovation involved here. They do have some experience with wood machining, but only for small components. Our staircase strings are up to five metres long! By the time the clamping tables have been extended, this will be an extremely expensive piece of equipment! 'It is clear that there are a few very large manufacturers of staircases in the UK, but they specialise in standard sizes which are sold in huge quantities to large builders and merchants. They are, in effect, making commodities and their manufacturing systems are designed to make large batches of standard components, which are then assembled on production lines. It is clear that we will never be able to compete profitably in this. part of the market. However, an increasing number of house builders are using stair- cases as an attractive feature of hallways, and some of these require more complex shapes (including winders) and better finishes [an example is shown Appendix 18.1]. In addition, refurbishment of existing houses often requires the installation of special staircases designed to fit into awkward spaces, and with non-standard heights. There is also increasing demand for expensive feature hardwoods such as oak and beech, which are not usually mass-produced. These changes are providing an opportunity for us to Part 3 Design become a specialist, not just serving our local area, but providing non-standard stair- cases throughout the country. For this to be competitive, our quality will have to be excellent, our delivery time will have to be quicker than the average local joinery shop, and our production costs will have to be much lower to more than offset our higher delivery costs. The new brand: going for growth 'Even with our somewhat limited cellular production system, I knew that we should start marketing our capability, and so we have branded this business "Pear Stairs", with an eye-catching new logo provided by a local image consultant, who also prepared an excellent new brochure. Our regional marketing campaign has already brought in a high level of enquiries, most of which are for special staircases, with delivery often required very quickly, often in less than two weeks. It is increasingly apparent that there is a huge opportunity to roll out our capability over an expanding geographical area, only limited by our ability to continue to supply quickly. I am now even more certain that we will need to mechanise some or all of the time-consuming processes, from design to final assembly. 'During our first year of running the cell, our monthly turnover of staircases has doubled from around £4000 to £8000, and is now only constrained by capacity. The monthly management accounts indicate that our staircases are now very profitable. Even within the local trading area (mostly agricultural and small market towns, with low population density, covering a radius of about 80 kilometres) demand seems to greatly exceed supply, and we are in effect limiting sales by quoting fairly long lead-times and high prices. If we could double turnover so easily, there is surely good potential to broaden our area to take in some larger centres of population, but only if we could increase our capacity substantially. The time is now right for deciding whether to invest in a state-of-the-art technology. CAD/CAM 'The system we have devised includes computer-aided design (CAD) and computer-aided manufacturing (CAM). No single firm supplies both for this type of joinery product, so we will have to take responsibility for linking the two systems. We have identified the best supplier of CAD systems for special stairs, and have already ordered a two-workstation system, so that we can begin trials of this as soon as possible. Even if we decide not to go ahead with the manufacturing system, we can continue to supply joinery design services using this new design technology. The digital output of the CAD is adaptable to the input requirements of the proposed CAM. This initial CAD system will cost us around £15000 for hardware and software. But the really big decision concerns the CAM system, which will cost in the order of £240 000, the single largest investment ever made in this small business! Everybody thinks I'm mad even contemplating it, but we have already prepared a business case for raising the money, and our bank manager has agreed to support this radical innovation. In practice, the bank's risk is relatively low, since the loan would be secured on our real estate, and for that reason we have been able to agree a very low interest rate. The shareholders (this is a family business) are supportive in principle, but a Boys and Boden (B) 197 little nervous, I think! This could be a make-or-break decision not only for the future of joinery manufacture within the company, but also of the company itself! 'In my view, the future of any generalist joinery job shop is under threat anyway. Already, window specialists have acquired the processes and technology to make bespoke windows efficiently, and the same is happening with doors. That will take volume away from the thousands of small joinery businesses that make a wide variety of "specials", threatening their very survival. This trend will be compounded and acceler- ated by the scarcity of trained joiners in this country! Eventually, specialisation and technology will displace the slow and inefficient traditional generalist craftsmen. There is a real window of opportunity here to be the first to adopt these technologies for staircases and there will be first-mover advantages, so we need to get this underway as soon as possible. The technology is extremely precise - positional accuracy is better than one-tenth of a millimetre for every cut, which is an order of magnitude better than can consistently be achieved by skilled joiners. This means we can get very accurate and tight joints, and, hopefully, the elimination of mistakes where drawings are misread! This CAD/CAM technology could actually be used to machine virtually any joinery compo- nents, but I feel that we simply must not be distracted by this capability. We want to specialise just in stairs, and therefore should not get into making windows, doors or any other special products, even in quiet periods. This is a strategic issue if you believe in the benefits of focus, you mustn't get distracted from focus!' The proposed design process 'On receipt of customers' orders, their sketches and any other forms of information sup- plied by the customer detailing their requirements will be delivered to the small design office. Here, the two CAD designers will extract the dimensions and apply them to the CAD staircase templates held on the system. Trials indicate that this will be a relatively quick process, taking between half an hour and two hours depending on the complexity of the design. Thus a detailed drawing of the whole staircase can be produced very quickly, and a copy can then be sent back to the customer for their confirmation. The system holds all the details on each staircase, so that when confirmation and approval is received, the details can be immediately passed electronically to the CAM system. In theory, it should be possible to e-mail the drawings to a customer, but at present most builders prefer paper and many sites do not even have faxes! It will be a few years before we can link electronically to both the buyers and the site managers of even the larger builders. Smaller builders may never adopt this technology. The proposed manufacturing process 'Briefly, the process will work something like this: one of the factory team workers will select and prepare the pre-planed timber for all the components to be produced for a staircase, working from a detailed cutting list and drawings supplied by the CAD system. This will involve him selecting planed timber from stock, cutting it to length, and some- times gluing pieces together. He will then pass these components through a sanding machine. He will continue until a full set of pieces is ready on a trolley. This "kit" of materials will then wait in a small buffer area prior to being machined on the CAM. 198 Part 3 Design 'The CAM operator will then carefully position each piece of timber in turn on an adjustable vacuum clamping device forming part of the bed of the CAM machine. Precise alignment will be facilitated by a laser light outline projected from the ceiling, corresponding to the staircase and component reference stored in the CAM server. The operator then will initiate the automatic machining of the components. The CAM machine will select appropriate tooling from its own tooling "library" and will complete the entire machining of the component with no further operator involvement. In the meantime, the operator will be able to position the next component on the opposite end of the CAM bed, and also clean away the wood chippings and sawdust at that end. In this way it should be possible to virtually eliminate set-up time. The machined com- ponent will then be unclamped from the bed and placed on another trolley; when filled, this will be taken to the assembly area. Every component of a staircase can be prepared in this way, including handrails, treads, risers, newels, etc. No setting-out will be required, saving enormous amounts of time. For example, a very complex string will take only about five minutes to machine; whereas a skilled joiner might take several hours just to mark out such a component, followed by up to a day using hand tools to cut the various features. 'The other three workers on each shift will be responsible for assembly and packing. Additional special clamping tables will be purchased which facilitate accurate assembly of all the components. Most of the assembly work involves gluing and wedging, but some components will be nailed or stapled using compressed-air-driven hand tools. Finally, the completed staircase will be lightly sanded, inspected and packed as a builder's kit ready for despatch. Where separate components will be assembled on-site, an additional step will include trial assembly within our factory. None of the workers will be traditionally skilled joiners, but will be newly trained to do these specific jobs. Both of the existing skilled joiners in the staircase cell are being trained as CAD opera- tors, which is where we expect them to work when the new machine is installed. 'By keeping the components on a limited number of trolleys between each stage of production, we can limit work-in-progress. This should keep the cell tidy and orderly, eliminating damage and shortages. It will also ensure quicker throughput times, sup- porting the short delivery lead-times required by many of our new customers.' Developing a business plan 'I have set up a working party to fine-tune the business plan for this project, prior to agreeing the loan conditions and ordering the machinery. We have contracted out a limited piece of market research to confirm the prospects for serving national builders and merchants. This indicates that there is a vast market for specials in the UK - far in excess of our capacity. Our UK market share would in fact be quite low, and our pro- posed differentiation based on delivery speed is confirmed as an important criterion in this market. We have therefore projected volumes growing to £50 000 per month by the end of Year 1. This represents sales of approximately 100 stairs, or around four or five per working day. I am quite confident that we can easily achieve this level before the end of 2000, given our experiences to date, so subsequent years should easily reach the forecast sales shown on the spreadsheet. 'Regarding costs, we have had to make a number of broad assumptions. Since this technology has never before been used to make staircases, the actual output speeds can Boys and Boden (B) 199 only be based on estimates derived from the CAM supplier's experience with much smaller timber components. Therefore, we have had to make all such estimates relatively pessimistic - "playing safe". In that way, if the system performs better than expectations, the breakeven point will be lower and the profit even higher. The detailed times per component and per staircase indicate that the breakeven output could easily be achieved by two teams of five operatives, working two shifts. This will be the first time we have used two-shift working, so we will undoubtedly experience some unforeseen problems. I have asked our accountant to prepare budgets for the first four years of the system [see Appendix 18.2], which clearly indicate that excellent profits should be achieved when we can reach the forecast 2003 sales of £80 000 per month. The entire team has endorsed my view that we should actually achieve this level before the end of 2002! 'So...this is not only a strategic investment which will ensure our future in bespoke joinery, but it will also give outstanding returns and positive cash flow after the learning period of Year 1! What do you think - have we missed anything? Do you agree that we should go ahead?' Questions 1 Evaluate the proposed CAD/CAM system in terms of its contribution to each of the five operations performance objectives. In doing this, you could make com- parisons between the existing and proposed system. 2 Analyse the degree of automation inherent in the proposed system. What other process elements could be automated, and what are unlikely ever to be auto- mated? Explain your rationale. 3 Is there any evidence that the CAM technology could be purchased at a smaller scale? and if so, why has Dean not considered that option? Is the proposed scale too biglambitious a change from the existing jobbing processes? 4 Where is there any integration between technologies? What risks will there be at this interface(s), and how could these be minimised? This case study should only be used after Boys and Boden (A) which gives back- ground information on the business and on the issues involved in setting up the cellular manufacturing system for special staircases. Cellular production The staircase cell had been a great success! In well under a year, the company had established an enviable reputation for high quality, quick delivery and very compet- itive prices. The best production configuration had proved to be a rectangular area of the factory, equipped with a full set of the requisite machinery (bench-saw, planer-thick- nesser, spindle moulder, tenoning machines, surface sander, assembly benches, etc.) and two skilled joiners (carpenters). They worked well together and their productivity was dramatically higher than had ever been seen in the job shop environment. As a result of the increased competitiveness, volume was increasing, but attempts to use three men had proved unsatisfactory. Given the limited space available, they seemed to be getting in each other's way, and productivity fell, reducing the benefits of cellu- lar manufacturing which had been found in the earlier months of the experiment. There was always a feeling that 'two's company and three's a crowd', as the two- person cell seemed to work as a better team than three. Dean Hammond, General Manager of Boys and Boden (B&B), reflected on their experience of changing the staircase production system: 'This has been one big learning experience for us all! We knew what machinery we would need, but it was not at all clear in advance how much space would be used pro- ductively and how the men would take to more repetitive work. Hardly any of their staircases are identical, but they do only make staircases, whereas before they would have moved on to windows, doors, and all sorts of other special items required by a mul- titude of customers. In practice we should not have worried, since the two men immediately took responsibility for their work area, sorted things out, and developed a pride in their specialised work. 'With only one cell, our output was clearly limited, so we began to think about adding a second identical cell. This would certainly introduce an element of competi- tion, which could have a positive impact on productivity and quality. However, we felt that this was not really the only way of expanding capacity. Perhaps there were ways of 196 introducing technology to simplify all the manufacture of these specialised staircases. In fact, this seemed to be one of the few industries left where most of the technologies. had changed very little during the micro-electronics revolution. Making specialised join- ery remains the domain of a diminishing number of highly skilled craftsmen, and the number of good quality apprenticeships had declined dramatically over the last 20 years. I knew we had to rethink what we were doing, and I knew this was an opportunity to focus on high-value-added products with relatively certain levels of future volume. 'For each job, the joiners start by "setting out" the strings (the long sides of a stair- case), drawing at full scale the overall shape and positions of cuts and grooves to be made in the wood. They get the required information from detailed drawings included. with the production specification. This specification is sometimes provided by the cus- tomer, but more often is prepared in the drawing office here. The setting out is a very time-consuming step, taking up to two days for all the components of a really complex staircase, for example, a flight of stairs which turns through 90 or more degrees, known as a "winder". The selling price of large, complex staircases can be very high, but the work content is correspondingly large, so our margins are not always that great!" The seed of an idea.... 'Whilst watching the staircases being made, I came to realise that the men were, in effect, duplicating. work done in a drawing office the data is same, but scaled. up from the drawings. If we were to grow this business, we would need to find ways of increasing the overall productivity of the system. We knew that there should be a way of getting the data directly transferred to the wood, and I know this has been achieved in many industries using CAD/CAM, so a few months ago I started investigating the possi- bility of purchasing suitable systems. There are several reputable manufacturers that make large computer-aided manufacturing (CAM) machining centres for use in the metals industry, but there appears to be only a few specifically developed for the wood- working industry. I then identified one German supplier that can modify and enlarge one of its largest machines for our application, but there will be an element of experi- mentation and innovation involved here. They do have some experience with wood machining, but only for small components. Our staircase strings are up to five metres long! By the time the clamping tables have been extended, this will be an extremely expensive piece of equipment! 'It is clear that there are a few very large manufacturers of staircases in the UK, but they specialise in standard sizes which are sold in huge quantities to large builders and merchants. They are, in effect, making commodities and their manufacturing systems are designed to make large batches of standard components, which are then assembled on production lines. It is clear that we will never be able to compete profitably in this. part of the market. However, an increasing number of house builders are using stair- cases as an attractive feature of hallways, and some of these require more complex shapes (including winders) and better finishes [an example is shown Appendix 18.1]. In addition, refurbishment of existing houses often requires the installation of special staircases designed to fit into awkward spaces, and with non-standard heights. There is also increasing demand for expensive feature hardwoods such as oak and beech, which are not usually mass-produced. These changes are providing an opportunity for us to Part 3 Design become a specialist, not just serving our local area, but providing non-standard stair- cases throughout the country. For this to be competitive, our quality will have to be excellent, our delivery time will have to be quicker than the average local joinery shop, and our production costs will have to be much lower to more than offset our higher delivery costs. The new brand: going for growth 'Even with our somewhat limited cellular production system, I knew that we should start marketing our capability, and so we have branded this business "Pear Stairs", with an eye-catching new logo provided by a local image consultant, who also prepared an excellent new brochure. Our regional marketing campaign has already brought in a high level of enquiries, most of which are for special staircases, with delivery often required very quickly, often in less than two weeks. It is increasingly apparent that there is a huge opportunity to roll out our capability over an expanding geographical area, only limited by our ability to continue to supply quickly. I am now even more certain that we will need to mechanise some or all of the time-consuming processes, from design to final assembly. 'During our first year of running the cell, our monthly turnover of staircases has doubled from around £4000 to £8000, and is now only constrained by capacity. The monthly management accounts indicate that our staircases are now very profitable. Even within the local trading area (mostly agricultural and small market towns, with low population density, covering a radius of about 80 kilometres) demand seems to greatly exceed supply, and we are in effect limiting sales by quoting fairly long lead-times and high prices. If we could double turnover so easily, there is surely good potential to broaden our area to take in some larger centres of population, but only if we could increase our capacity substantially. The time is now right for deciding whether to invest in a state-of-the-art technology. CAD/CAM 'The system we have devised includes computer-aided design (CAD) and computer-aided manufacturing (CAM). No single firm supplies both for this type of joinery product, so we will have to take responsibility for linking the two systems. We have identified the best supplier of CAD systems for special stairs, and have already ordered a two-workstation system, so that we can begin trials of this as soon as possible. Even if we decide not to go ahead with the manufacturing system, we can continue to supply joinery design services using this new design technology. The digital output of the CAD is adaptable to the input requirements of the proposed CAM. This initial CAD system will cost us around £15000 for hardware and software. But the really big decision concerns the CAM system, which will cost in the order of £240 000, the single largest investment ever made in this small business! Everybody thinks I'm mad even contemplating it, but we have already prepared a business case for raising the money, and our bank manager has agreed to support this radical innovation. In practice, the bank's risk is relatively low, since the loan would be secured on our real estate, and for that reason we have been able to agree a very low interest rate. The shareholders (this is a family business) are supportive in principle, but a Boys and Boden (B) 197 little nervous, I think! This could be a make-or-break decision not only for the future of joinery manufacture within the company, but also of the company itself! 'In my view, the future of any generalist joinery job shop is under threat anyway. Already, window specialists have acquired the processes and technology to make bespoke windows efficiently, and the same is happening with doors. That will take volume away from the thousands of small joinery businesses that make a wide variety of "specials", threatening their very survival. This trend will be compounded and acceler- ated by the scarcity of trained joiners in this country! Eventually, specialisation and technology will displace the slow and inefficient traditional generalist craftsmen. There is a real window of opportunity here to be the first to adopt these technologies for staircases and there will be first-mover advantages, so we need to get this underway as soon as possible. The technology is extremely precise - positional accuracy is better than one-tenth of a millimetre for every cut, which is an order of magnitude better than can consistently be achieved by skilled joiners. This means we can get very accurate and tight joints, and, hopefully, the elimination of mistakes where drawings are misread! This CAD/CAM technology could actually be used to machine virtually any joinery compo- nents, but I feel that we simply must not be distracted by this capability. We want to specialise just in stairs, and therefore should not get into making windows, doors or any other special products, even in quiet periods. This is a strategic issue if you believe in the benefits of focus, you mustn't get distracted from focus!' The proposed design process 'On receipt of customers' orders, their sketches and any other forms of information sup- plied by the customer detailing their requirements will be delivered to the small design office. Here, the two CAD designers will extract the dimensions and apply them to the CAD staircase templates held on the system. Trials indicate that this will be a relatively quick process, taking between half an hour and two hours depending on the complexity of the design. Thus a detailed drawing of the whole staircase can be produced very quickly, and a copy can then be sent back to the customer for their confirmation. The system holds all the details on each staircase, so that when confirmation and approval is received, the details can be immediately passed electronically to the CAM system. In theory, it should be possible to e-mail the drawings to a customer, but at present most builders prefer paper and many sites do not even have faxes! It will be a few years before we can link electronically to both the buyers and the site managers of even the larger builders. Smaller builders may never adopt this technology. The proposed manufacturing process 'Briefly, the process will work something like this: one of the factory team workers will select and prepare the pre-planed timber for all the components to be produced for a staircase, working from a detailed cutting list and drawings supplied by the CAD system. This will involve him selecting planed timber from stock, cutting it to length, and some- times gluing pieces together. He will then pass these components through a sanding machine. He will continue until a full set of pieces is ready on a trolley. This "kit" of materials will then wait in a small buffer area prior to being machined on the CAM. 198 Part 3 Design 'The CAM operator will then carefully position each piece of timber in turn on an adjustable vacuum clamping device forming part of the bed of the CAM machine. Precise alignment will be facilitated by a laser light outline projected from the ceiling, corresponding to the staircase and component reference stored in the CAM server. The operator then will initiate the automatic machining of the components. The CAM machine will select appropriate tooling from its own tooling "library" and will complete the entire machining of the component with no further operator involvement. In the meantime, the operator will be able to position the next component on the opposite end of the CAM bed, and also clean away the wood chippings and sawdust at that end. In this way it should be possible to virtually eliminate set-up time. The machined com- ponent will then be unclamped from the bed and placed on another trolley; when filled, this will be taken to the assembly area. Every component of a staircase can be prepared in this way, including handrails, treads, risers, newels, etc. No setting-out will be required, saving enormous amounts of time. For example, a very complex string will take only about five minutes to machine; whereas a skilled joiner might take several hours just to mark out such a component, followed by up to a day using hand tools to cut the various features. 'The other three workers on each shift will be responsible for assembly and packing. Additional special clamping tables will be purchased which facilitate accurate assembly of all the components. Most of the assembly work involves gluing and wedging, but some components will be nailed or stapled using compressed-air-driven hand tools. Finally, the completed staircase will be lightly sanded, inspected and packed as a builder's kit ready for despatch. Where separate components will be assembled on-site, an additional step will include trial assembly within our factory. None of the workers will be traditionally skilled joiners, but will be newly trained to do these specific jobs. Both of the existing skilled joiners in the staircase cell are being trained as CAD opera- tors, which is where we expect them to work when the new machine is installed. 'By keeping the components on a limited number of trolleys between each stage of production, we can limit work-in-progress. This should keep the cell tidy and orderly, eliminating damage and shortages. It will also ensure quicker throughput times, sup- porting the short delivery lead-times required by many of our new customers.' Developing a business plan 'I have set up a working party to fine-tune the business plan for this project, prior to agreeing the loan conditions and ordering the machinery. We have contracted out a limited piece of market research to confirm the prospects for serving national builders and merchants. This indicates that there is a vast market for specials in the UK - far in excess of our capacity. Our UK market share would in fact be quite low, and our pro- posed differentiation based on delivery speed is confirmed as an important criterion in this market. We have therefore projected volumes growing to £50 000 per month by the end of Year 1. This represents sales of approximately 100 stairs, or around four or five per working day. I am quite confident that we can easily achieve this level before the end of 2000, given our experiences to date, so subsequent years should easily reach the forecast sales shown on the spreadsheet. 'Regarding costs, we have had to make a number of broad assumptions. Since this technology has never before been used to make staircases, the actual output speeds can Boys and Boden (B) 199 only be based on estimates derived from the CAM supplier's experience with much smaller timber components. Therefore, we have had to make all such estimates relatively pessimistic - "playing safe". In that way, if the system performs better than expectations, the breakeven point will be lower and the profit even higher. The detailed times per component and per staircase indicate that the breakeven output could easily be achieved by two teams of five operatives, working two shifts. This will be the first time we have used two-shift working, so we will undoubtedly experience some unforeseen problems. I have asked our accountant to prepare budgets for the first four years of the system [see Appendix 18.2], which clearly indicate that excellent profits should be achieved when we can reach the forecast 2003 sales of £80 000 per month. The entire team has endorsed my view that we should actually achieve this level before the end of 2002! 'So...this is not only a strategic investment which will ensure our future in bespoke joinery, but it will also give outstanding returns and positive cash flow after the learning period of Year 1! What do you think - have we missed anything? Do you agree that we should go ahead?' Questions 1 Evaluate the proposed CAD/CAM system in terms of its contribution to each of the five operations performance objectives. In doing this, you could make com- parisons between the existing and proposed system. 2 Analyse the degree of automation inherent in the proposed system. What other process elements could be automated, and what are unlikely ever to be auto- mated? Explain your rationale. 3 Is there any evidence that the CAM technology could be purchased at a smaller scale? and if so, why has Dean not considered that option? Is the proposed scale too biglambitious a change from the existing jobbing processes? 4 Where is there any integration between technologies? What risks will there be at this interface(s), and how could these be minimised? This case study should only be used after Boys and Boden (A) which gives back- ground information on the business and on the issues involved in setting up the cellular manufacturing system for special staircases. Cellular production The staircase cell had been a great success! In well under a year, the company had established an enviable reputation for high quality, quick delivery and very compet- itive prices. The best production configuration had proved to be a rectangular area of the factory, equipped with a full set of the requisite machinery (bench-saw, planer-thick- nesser, spindle moulder, tenoning machines, surface sander, assembly benches, etc.) and two skilled joiners (carpenters). They worked well together and their productivity was dramatically higher than had ever been seen in the job shop environment. As a result of the increased competitiveness, volume was increasing, but attempts to use three men had proved unsatisfactory. Given the limited space available, they seemed to be getting in each other's way, and productivity fell, reducing the benefits of cellu- lar manufacturing which had been found in the earlier months of the experiment. There was always a feeling that 'two's company and three's a crowd', as the two- person cell seemed to work as a better team than three. Dean Hammond, General Manager of Boys and Boden (B&B), reflected on their experience of changing the staircase production system: 'This has been one big learning experience for us all! We knew what machinery we would need, but it was not at all clear in advance how much space would be used pro- ductively and how the men would take to more repetitive work. Hardly any of their staircases are identical, but they do only make staircases, whereas before they would have moved on to windows, doors, and all sorts of other special items required by a mul- titude of customers. In practice we should not have worried, since the two men immediately took responsibility for their work area, sorted things out, and developed a pride in their specialised work. 'With only one cell, our output was clearly limited, so we began to think about adding a second identical cell. This would certainly introduce an element of competi- tion, which could have a positive impact on productivity and quality. However, we felt that this was not really the only way of expanding capacity. Perhaps there were ways of 196 introducing technology to simplify all the manufacture of these specialised staircases. In fact, this seemed to be one of the few industries left where most of the technologies. had changed very little during the micro-electronics revolution. Making specialised join- ery remains the domain of a diminishing number of highly skilled craftsmen, and the number of good quality apprenticeships had declined dramatically over the last 20 years. I knew we had to rethink what we were doing, and I knew this was an opportunity to focus on high-value-added products with relatively certain levels of future volume. 'For each job, the joiners start by "setting out" the strings (the long sides of a stair- case), drawing at full scale the overall shape and positions of cuts and grooves to be made in the wood. They get the required information from detailed drawings included. with the production specification. This specification is sometimes provided by the cus- tomer, but more often is prepared in the drawing office here. The setting out is a very time-consuming step, taking up to two days for all the components of a really complex staircase, for example, a flight of stairs which turns through 90 or more degrees, known as a "winder". The selling price of large, complex staircases can be very high, but the work content is correspondingly large, so our margins are not always that great!" The seed of an idea.... 'Whilst watching the staircases being made, I came to realise that the men were, in effect, duplicating. work done in a drawing office the data is same, but scaled. up from the drawings. If we were to grow this business, we would need to find ways of increasing the overall productivity of the system. We knew that there should be a way of getting the data directly transferred to the wood, and I know this has been achieved in many industries using CAD/CAM, so a few months ago I started investigating the possi- bility of purchasing suitable systems. There are several reputable manufacturers that make large computer-aided manufacturing (CAM) machining centres for use in the metals industry, but there appears to be only a few specifically developed for the wood- working industry. I then identified one German supplier that can modify and enlarge one of its largest machines for our application, but there will be an element of experi- mentation and innovation involved here. They do have some experience with wood machining, but only for small components. Our staircase strings are up to five metres long! By the time the clamping tables have been extended, this will be an extremely expensive piece of equipment! 'It is clear that there are a few very large manufacturers of staircases in the UK, but they specialise in standard sizes which are sold in huge quantities to large builders and merchants. They are, in effect, making commodities and their manufacturing systems are designed to make large batches of standard components, which are then assembled on production lines. It is clear that we will never be able to compete profitably in this. part of the market. However, an increasing number of house builders are using stair- cases as an attractive feature of hallways, and some of these require more complex shapes (including winders) and better finishes [an example is shown Appendix 18.1]. In addition, refurbishment of existing houses often requires the installation of special staircases designed to fit into awkward spaces, and with non-standard heights. There is also increasing demand for expensive feature hardwoods such as oak and beech, which are not usually mass-produced. These changes are providing an opportunity for us to Part 3 Design become a specialist, not just serving our local area, but providing non-standard stair- cases throughout the country. For this to be competitive, our quality will have to be excellent, our delivery time will have to be quicker than the average local joinery shop, and our production costs will have to be much lower to more than offset our higher delivery costs. The new brand: going for growth 'Even with our somewhat limited cellular production system, I knew that we should start marketing our capability, and so we have branded this business "Pear Stairs", with an eye-catching new logo provided by a local image consultant, who also prepared an excellent new brochure. Our regional marketing campaign has already brought in a high level of enquiries, most of which are for special staircases, with delivery often required very quickly, often in less than two weeks. It is increasingly apparent that there is a huge opportunity to roll out our capability over an expanding geographical area, only limited by our ability to continue to supply quickly. I am now even more certain that we will need to mechanise some or all of the time-consuming processes, from design to final assembly. 'During our first year of running the cell, our monthly turnover of staircases has doubled from around £4000 to £8000, and is now only constrained by capacity. The monthly management accounts indicate that our staircases are now very profitable. Even within the local trading area (mostly agricultural and small market towns, with low population density, covering a radius of about 80 kilometres) demand seems to greatly exceed supply, and we are in effect limiting sales by quoting fairly long lead-times and high prices. If we could double turnover so easily, there is surely good potential to broaden our area to take in some larger centres of population, but only if we could increase our capacity substantially. The time is now right for deciding whether to invest in a state-of-the-art technology. CAD/CAM 'The system we have devised includes computer-aided design (CAD) and computer-aided manufacturing (CAM). No single firm supplies both for this type of joinery product, so we will have to take responsibility for linking the two systems. We have identified the best supplier of CAD systems for special stairs, and have already ordered a two-workstation system, so that we can begin trials of this as soon as possible. Even if we decide not to go ahead with the manufacturing system, we can continue to supply joinery design services using this new design technology. The digital output of the CAD is adaptable to the input requirements of the proposed CAM. This initial CAD system will cost us around £15000 for hardware and software. But the really big decision concerns the CAM system, which will cost in the order of £240 000, the single largest investment ever made in this small business! Everybody thinks I'm mad even contemplating it, but we have already prepared a business case for raising the money, and our bank manager has agreed to support this radical innovation. In practice, the bank's risk is relatively low, since the loan would be secured on our real estate, and for that reason we have been able to agree a very low interest rate. The shareholders (this is a family business) are supportive in principle, but a Boys and Boden (B) 197 little nervous, I think! This could be a make-or-break decision not only for the future of joinery manufacture within the company, but also of the company itself! 'In my view, the future of any generalist joinery job shop is under threat anyway. Already, window specialists have acquired the processes and technology to make bespoke windows efficiently, and the same is happening with doors. That will take volume away from the thousands of small joinery businesses that make a wide variety of "specials", threatening their very survival. This trend will be compounded and acceler- ated by the scarcity of trained joiners in this country! Eventually, specialisation and technology will displace the slow and inefficient traditional generalist craftsmen. There is a real window of opportunity here to be the first to adopt these technologies for staircases and there will be first-mover advantages, so we need to get this underway as soon as possible. The technology is extremely precise - positional accuracy is better than one-tenth of a millimetre for every cut, which is an order of magnitude better than can consistently be achieved by skilled joiners. This means we can get very accurate and tight joints, and, hopefully, the elimination of mistakes where drawings are misread! This CAD/CAM technology could actually be used to machine virtually any joinery compo- nents, but I feel that we simply must not be distracted by this capability. We want to specialise just in stairs, and therefore should not get into making windows, doors or any other special products, even in quiet periods. This is a strategic issue if you believe in the benefits of focus, you mustn't get distracted from focus!' The proposed design process 'On receipt of customers' orders, their sketches and any other forms of information sup- plied by the customer detailing their requirements will be delivered to the small design office. Here, the two CAD designers will extract the dimensions and apply them to the CAD staircase templates held on the system. Trials indicate that this will be a relatively quick process, taking between half an hour and two hours depending on the complexity of the design. Thus a detailed drawing of the whole staircase can be produced very quickly, and a copy can then be sent back to the customer for their confirmation. The system holds all the details on each staircase, so that when confirmation and approval is received, the details can be immediately passed electronically to the CAM system. In theory, it should be possible to e-mail the drawings to a customer, but at present most builders prefer paper and many sites do not even have faxes! It will be a few years before we can link electronically to both the buyers and the site managers of even the larger builders. Smaller builders may never adopt this technology. The proposed manufacturing process 'Briefly, the process will work something like this: one of the factory team workers will select and prepare the pre-planed timber for all the components to be produced for a staircase, working from a detailed cutting list and drawings supplied by the CAD system. This will involve him selecting planed timber from stock, cutting it to length, and some- times gluing pieces together. He will then pass these components through a sanding machine. He will continue until a full set of pieces is ready on a trolley. This "kit" of materials will then wait in a small buffer area prior to being machined on the CAM. 198 Part 3 Design 'The CAM operator will then carefully position each piece of timber in turn on an adjustable vacuum clamping device forming part of the bed of the CAM machine. Precise alignment will be facilitated by a laser light outline projected from the ceiling, corresponding to the staircase and component reference stored in the CAM server. The operator then will initiate the automatic machining of the components. The CAM machine will select appropriate tooling from its own tooling "library" and will complete the entire machining of the component with no further operator involvement. In the meantime, the operator will be able to position the next component on the opposite end of the CAM bed, and also clean away the wood chippings and sawdust at that end. In this way it should be possible to virtually eliminate set-up time. The machined com- ponent will then be unclamped from the bed and placed on another trolley; when filled, this will be taken to the assembly area. Every component of a staircase can be prepared in this way, including handrails, treads, risers, newels, etc. No setting-out will be required, saving enormous amounts of time. For example, a very complex string will take only about five minutes to machine; whereas a skilled joiner might take several hours just to mark out such a component, followed by up to a day using hand tools to cut the various features. 'The other three workers on each shift will be responsible for assembly and packing. Additional special clamping tables will be purchased which facilitate accurate assembly of all the components. Most of the assembly work involves gluing and wedging, but some components will be nailed or stapled using compressed-air-driven hand tools. Finally, the completed staircase will be lightly sanded, inspected and packed as a builder's kit ready for despatch. Where separate components will be assembled on-site, an additional step will include trial assembly within our factory. None of the workers will be traditionally skilled joiners, but will be newly trained to do these specific jobs. Both of the existing skilled joiners in the staircase cell are being trained as CAD opera- tors, which is where we expect them to work when the new machine is installed. 'By keeping the components on a limited number of trolleys between each stage of production, we can limit work-in-progress. This should keep the cell tidy and orderly, eliminating damage and shortages. It will also ensure quicker throughput times, sup- porting the short delivery lead-times required by many of our new customers.' Developing a business plan 'I have set up a working party to fine-tune the business plan for this project, prior to agreeing the loan conditions and ordering the machinery. We have contracted out a limited piece of market research to confirm the prospects for serving national builders and merchants. This indicates that there is a vast market for specials in the UK - far in excess of our capacity. Our UK market share would in fact be quite low, and our pro- posed differentiation based on delivery speed is confirmed as an important criterion in this market. We have therefore projected volumes growing to £50 000 per month by the end of Year 1. This represents sales of approximately 100 stairs, or around four or five per working day. I am quite confident that we can easily achieve this level before the end of 2000, given our experiences to date, so subsequent years should easily reach the forecast sales shown on the spreadsheet. 'Regarding costs, we have had to make a number of broad assumptions. Since this technology has never before been used to make staircases, the actual output speeds can Boys and Boden (B) 199 only be based on estimates derived from the CAM supplier's experience with much smaller timber components. Therefore, we have had to make all such estimates relatively pessimistic - "playing safe". In that way, if the system performs better than expectations, the breakeven point will be lower and the profit even higher. The detailed times per component and per staircase indicate that the breakeven output could easily be achieved by two teams of five operatives, working two shifts. This will be the first time we have used two-shift working, so we will undoubtedly experience some unforeseen problems. I have asked our accountant to prepare budgets for the first four years of the system [see Appendix 18.2], which clearly indicate that excellent profits should be achieved when we can reach the forecast 2003 sales of £80 000 per month. The entire team has endorsed my view that we should actually achieve this level before the end of 2002! 'So...this is not only a strategic investment which will ensure our future in bespoke joinery, but it will also give outstanding returns and positive cash flow after the learning period of Year 1! What do you think - have we missed anything? Do you agree that we should go ahead?' Questions 1 Evaluate the proposed CAD/CAM system in terms of its contribution to each of the five operations performance objectives. In doing this, you could make com- parisons between the existing and proposed system. 2 Analyse the degree of automation inherent in the proposed system. What other process elements could be automated, and what are unlikely ever to be auto- mated? Explain your rationale. 3 Is there any evidence that the CAM technology could be purchased at a smaller scale? and if so, why has Dean not considered that option? Is the proposed scale too biglambitious a change from the existing jobbing processes? 4 Where is there any integration between technologies? What risks will there be at this interface(s), and how could these be minimised? This case study should only be used after Boys and Boden (A) which gives back- ground information on the business and on the issues involved in setting up the cellular manufacturing system for special staircases. Cellular production The staircase cell had been a great success! In well under a year, the company had established an enviable reputation for high quality, quick delivery and very compet- itive prices. The best production configuration had proved to be a rectangular area of the factory, equipped with a full set of the requisite machinery (bench-saw, planer-thick- nesser, spindle moulder, tenoning machines, surface sander, assembly benches, etc.) and two skilled joiners (carpenters). They worked well together and their productivity was dramatically higher than had ever been seen in the job shop environment. As a result of the increased competitiveness, volume was increasing, but attempts to use three men had proved unsatisfactory. Given the limited space available, they seemed to be getting in each other's way, and productivity fell, reducing the benefits of cellu- lar manufacturing which had been found in the earlier months of the experiment. There was always a feeling that 'two's company and three's a crowd', as the two- person cell seemed to work as a better team than three. Dean Hammond, General Manager of Boys and Boden (B&B), reflected on their experience of changing the staircase production system: 'This has been one big learning experience for us all! We knew what machinery we would need, but it was not at all clear in advance how much space would be used pro- ductively and how the men would take to more repetitive work. Hardly any of their staircases are identical, but they do only make staircases, whereas before they would have moved on to windows, doors, and all sorts of other special items required by a mul- titude of customers. In practice we should not have worried, since the two men immediately took responsibility for their work area, sorted things out, and developed a pride in their specialised work. 'With only one cell, our output was clearly limited, so we began to think about adding a second identical cell. This would certainly introduce an element of competi- tion, which could have a positive impact on productivity and quality. However, we felt that this was not really the only way of expanding capacity. Perhaps there were ways of 196 introducing technology to simplify all the manufacture of these specialised staircases. In fact, this seemed to be one of the few industries left where most of the technologies. had changed very little during the micro-electronics revolution. Making specialised join- ery remains the domain of a diminishing number of highly skilled craftsmen, and the number of good quality apprenticeships had declined dramatically over the last 20 years. I knew we had to rethink what we were doing, and I knew this was an opportunity to focus on high-value-added products with relatively certain levels of future volume. 'For each job, the joiners start by "setting out" the strings (the long sides of a stair- case), drawing at full scale the overall shape and positions of cuts and grooves to be made in the wood. They get the required information from detailed drawings included. with the production specification. This specification is sometimes provided by the cus- tomer, but more often is prepared in the drawing office here. The setting out is a very time-consuming step, taking up to two days for all the components of a really complex staircase, for example, a flight of stairs which turns through 90 or more degrees, known as a "winder". The selling price of large, complex staircases can be very high, but the work content is correspondingly large, so our margins are not always that great!" The seed of an idea.... 'Whilst watching the staircases being made, I came to realise that the men were, in effect, duplicating. work done in a drawing office the data is same, but scaled. up from the drawings. If we were to grow this business, we would need to find ways of increasing the overall productivity of the system. We knew that there should be a way of getting the data directly transferred to the wood, and I know this has been achieved in many industries using CAD/CAM, so a few months ago I started investigating the possi- bility of purchasing suitable systems. There are several reputable manufacturers that make large computer-aided manufacturing (CAM) machining centres for use in the metals industry, but there appears to be only a few specifically developed for the wood- working industry. I then identified one German supplier that can modify and enlarge one of its largest machines for our application, but there will be an element of experi- mentation and innovation involved here. They do have some experience with wood machining, but only for small components. Our staircase strings are up to five metres long! By the time the clamping tables have been extended, this will be an extremely expensive piece of equipment! 'It is clear that there are a few very large manufacturers of staircases in the UK, but they specialise in standard sizes which are sold in huge quantities to large builders and merchants. They are, in effect, making commodities and their manufacturing systems are designed to make large batches of standard components, which are then assembled on production lines. It is clear that we will never be able to compete profitably in this. part of the market. However, an increasing number of house builders are using stair- cases as an attractive feature of hallways, and some of these require more complex shapes (including winders) and better finishes [an example is shown Appendix 18.1]. In addition, refurbishment of existing houses often requires the installation of special staircases designed to fit into awkward spaces, and with non-standard heights. There is also increasing demand for expensive feature hardwoods such as oak and beech, which are not usually mass-produced. These changes are providing an opportunity for us to Part 3 Design become a specialist, not just serving our local area, but providing non-standard stair- cases throughout the country. For this to be competitive, our quality will have to be excellent, our delivery time will have to be quicker than the average local joinery shop, and our production costs will have to be much lower to more than offset our higher delivery costs. The new brand: going for growth 'Even with our somewhat limited cellular production system, I knew that we should start marketing our capability, and so we have branded this business "Pear Stairs", with an eye-catching new logo provided by a local image consultant, who also prepared an excellent new brochure. Our regional marketing campaign has already brought in a high level of enquiries, most of which are for special staircases, with delivery often required very quickly, often in less than two weeks. It is increasingly apparent that there is a huge opportunity to roll out our capability over an expanding geographical area, only limited by our ability to continue to supply quickly. I am now even more certain that we will need to mechanise some or all of the time-consuming processes, from design to final assembly. 'During our first year of running the cell, our monthly turnover of staircases has doubled from around £4000 to £8000, and is now only constrained by capacity. The monthly management accounts indicate that our staircases are now very profitable. Even within the local trading area (mostly agricultural and small market towns, with low population density, covering a radius of about 80 kilometres) demand seems to greatly exceed supply, and we are in effect limiting sales by quoting fairly long lead-times and high prices. If we could double turnover so easily, there is surely good potential to broaden our area to take in some larger centres of population, but only if we could increase our capacity substantially. The time is now right for deciding whether to invest in a state-of-the-art technology. CAD/CAM 'The system we have devised includes computer-aided design (CAD) and computer-aided manufacturing (CAM). No single firm supplies both for this type of joinery product, so we will have to take responsibility for linking the two systems. We have identified the best supplier of CAD systems for special stairs, and have already ordered a two-workstation system, so that we can begin trials of this as soon as possible. Even if we decide not to go ahead with the manufacturing system, we can continue to supply joinery design services using this new design technology. The digital output of the CAD is adaptable to the input requirements of the proposed CAM. This initial CAD system will cost us around £15000 for hardware and software. But the really big decision concerns the CAM system, which will cost in the order of £240 000, the single largest investment ever made in this small business! Everybody thinks I'm mad even contemplating it, but we have already prepared a business case for raising the money, and our bank manager has agreed to support this radical innovation. In practice, the bank's risk is relatively low, since the loan would be secured on our real estate, and for that reason we have been able to agree a very low interest rate. The shareholders (this is a family business) are supportive in principle, but a Boys and Boden (B) 197 little nervous, I think! This could be a make-or-break decision not only for the future of joinery manufacture within the company, but also of the company itself! 'In my view, the future of any generalist joinery job shop is under threat anyway. Already, window specialists have acquired the processes and technology to make bespoke windows efficiently, and the same is happening with doors. That will take volume away from the thousands of small joinery businesses that make a wide variety of "specials", threatening their very survival. This trend will be compounded and acceler- ated by the scarcity of trained joiners in this country! Eventually, specialisation and technology will displace the slow and inefficient traditional generalist craftsmen. There is a real window of opportunity here to be the first to adopt these technologies for staircases and there will be first-mover advantages, so we need to get this underway as soon as possible. The technology is extremely precise - positional accuracy is better than one-tenth of a millimetre for every cut, which is an order of magnitude better than can consistently be achieved by skilled joiners. This means we can get very accurate and tight joints, and, hopefully, the elimination of mistakes where drawings are misread! This CAD/CAM technology could actually be used to machine virtually any joinery compo- nents, but I feel that we simply must not be distracted by this capability. We want to specialise just in stairs, and therefore should not get into making windows, doors or any other special products, even in quiet periods. This is a strategic issue if you believe in the benefits of focus, you mustn't get distracted from focus!' The proposed design process 'On receipt of customers' orders, their sketches and any other forms of information sup- plied by the customer detailing their requirements will be delivered to the small design office. Here, the two CAD designers will extract the dimensions and apply them to the CAD staircase templates held on the system. Trials indicate that this will be a relatively quick process, taking between half an hour and two hours depending on the complexity of the design. Thus a detailed drawing of the whole staircase can be produced very quickly, and a copy can then be sent back to the customer for their confirmation. The system holds all the details on each staircase, so that when confirmation and approval is received, the details can be immediately passed electronically to the CAM system. In theory, it should be possible to e-mail the drawings to a customer, but at present most builders prefer paper and many sites do not even have faxes! It will be a few years before we can link electronically to both the buyers and the site managers of even the larger builders. Smaller builders may never adopt this technology. The proposed manufacturing process 'Briefly, the process will work something like this: one of the factory team workers will select and prepare the pre-planed timber for all the components to be produced for a staircase, working from a detailed cutting list and drawings supplied by the CAD system. This will involve him selecting planed timber from stock, cutting it to length, and some- times gluing pieces together. He will then pass these components through a sanding machine. He will continue until a full set of pieces is ready on a trolley. This "kit" of materials will then wait in a small buffer area prior to being machined on the CAM. 198 Part 3 Design 'The CAM operator will then carefully position each piece of timber in turn on an adjustable vacuum clamping device forming part of the bed of the CAM machine. Precise alignment will be facilitated by a laser light outline projected from the ceiling, corresponding to the staircase and component reference stored in the CAM server. The operator then will initiate the automatic machining of the components. The CAM machine will select appropriate tooling from its own tooling "library" and will complete the entire machining of the component with no further operator involvement. In the meantime, the operator will be able to position the next component on the opposite end of the CAM bed, and also clean away the wood chippings and sawdust at that end. In this way it should be possible to virtually eliminate set-up time. The machined com- ponent will then be unclamped from the bed and placed on another trolley; when filled, this will be taken to the assembly area. Every component of a staircase can be prepared in this way, including handrails, treads, risers, newels, etc. No setting-out will be required, saving enormous amounts of time. For example, a very complex string will take only about five minutes to machine; whereas a skilled joiner might take several hours just to mark out such a component, followed by up to a day using hand tools to cut the various features. 'The other three workers on each shift will be responsible for assembly and packing. Additional special clamping tables will be purchased which facilitate accurate assembly of all the components. Most of the assembly work involves gluing and wedging, but some components will be nailed or stapled using compressed-air-driven hand tools. Finally, the completed staircase will be lightly sanded, inspected and packed as a builder's kit ready for despatch. Where separate components will be assembled on-site, an additional step will include trial assembly within our factory. None of the workers will be traditionally skilled joiners, but will be newly trained to do these specific jobs. Both of the existing skilled joiners in the staircase cell are being trained as CAD opera- tors, which is where we expect them to work when the new machine is installed. 'By keeping the components on a limited number of trolleys between each stage of production, we can limit work-in-progress. This should keep the cell tidy and orderly, eliminating damage and shortages. It will also ensure quicker throughput times, sup- porting the short delivery lead-times required by many of our new customers.' Developing a business plan 'I have set up a working party to fine-tune the business plan for this project, prior to agreeing the loan conditions and ordering the machinery. We have contracted out a limited piece of market research to confirm the prospects for serving national builders and merchants. This indicates that there is a vast market for specials in the UK - far in excess of our capacity. Our UK market share would in fact be quite low, and our pro- posed differentiation based on delivery speed is confirmed as an important criterion in this market. We have therefore projected volumes growing to £50 000 per month by the end of Year 1. This represents sales of approximately 100 stairs, or around four or five per working day. I am quite confident that we can easily achieve this level before the end of 2000, given our experiences to date, so subsequent years should easily reach the forecast sales shown on the spreadsheet. 'Regarding costs, we have had to make a number of broad assumptions. Since this technology has never before been used to make staircases, the actual output speeds can Boys and Boden (B) 199 only be based on estimates derived from the CAM supplier's experience with much smaller timber components. Therefore, we have had to make all such estimates relatively pessimistic - "playing safe". In that way, if the system performs better than expectations, the breakeven point will be lower and the profit even higher. The detailed times per component and per staircase indicate that the breakeven output could easily be achieved by two teams of five operatives, working two shifts. This will be the first time we have used two-shift working, so we will undoubtedly experience some unforeseen problems. I have asked our accountant to prepare budgets for the first four years of the system [see Appendix 18.2], which clearly indicate that excellent profits should be achieved when we can reach the forecast 2003 sales of £80 000 per month. The entire team has endorsed my view that we should actually achieve this level before the end of 2002! 'So...this is not only a strategic investment which will ensure our future in bespoke joinery, but it will also give outstanding returns and positive cash flow after the learning period of Year 1! What do you think - have we missed anything? Do you agree that we should go ahead?' Questions 1 Evaluate the proposed CAD/CAM system in terms of its contribution to each of the five operations performance objectives. In doing this, you could make com- parisons between the existing and proposed system. 2 Analyse the degree of automation inherent in the proposed system. What other process elements could be automated, and what are unlikely ever to be auto- mated? Explain your rationale. 3 Is there any evidence that the CAM technology could be purchased at a smaller scale? and if so, why has Dean not considered that option? Is the proposed scale too biglambitious a change from the existing jobbing processes? 4 Where is there any integration between technologies? What risks will there be at this interface(s), and how could these be minimised?

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ANSWER1 Performance Objectives of High Quality Conformance to a standard isnt the only criterion for quality Its all about how well a product meets its intended purpose the features desirability and t... View the full answer