Each company works with design for assembly (DFA) methods for different reasons. Some companies want to take cost out of their products, some want to make more products in their factories, and some want to simplify the product to increase quality and reliability.
In a growing market, a company wants to reduce labor content to get more products through the factory and to meet demand without adding assembly workers. In a growing market, a company also wants to reduce the floor space required to meet demand without building another factory.
Remarkably, the goals are similar for companies in declining markets, though the reasons are different. In declining markets, a company wants to meet demand with the fewest assembly workers, so it brings work from consolidated plants into the factory. Freed-up floor space is desired to provide space for the work from consolidated plants.
In either case, a successful DFA program can help. Done well, a DFA project can result in material and labor savings of 50 percent. However, establishing a sustainable DFA program that becomes part of a company’s culture takes some effort. What follows are six lessons learned through a successful DFA program at my company, Hypertherm Inc. Privately held, we design and manufacture plasma cutting systems for the metal cutting industry.
1. Everybody Has to Take the Leap
No matter how you slice it, the first DFA project is a leap of faith. Without guarantees and without certainty of results, someone in the organization must muster enough courage, or realize enough fear, to start DFA.The most positive way for the leap of faith to come about is in response to what Jim Collins and Jerry Porras, authors of the book, Built to Last: Successful Habits of Visionary Companies, call a well-intentioned BHAG (big, hairy, audacious goal) issued from a company leader. “I want you to take 50 percent of the cost out of the next product.” Congratulations! You now have the reason to try DFA. You simply call a meeting and tell your design leaders what you were asked to do-make half the cost of the next product disappear.
After their chuckles subside, ask them if they know how they are going to meet the BHAG. When they say no, that’s when you bring up the radical idea of DFA. The design leaders will think you are nuts, because to them no one in their right mind would imagine being able to take 50 percent of the cost out of a product just by using straightforward DFA tools. Give them a couple of days to think of an alternative approach, and then call another meeting. If no one has a better idea (and they won’t), you get to try DFA.
The BHAG scenario is the preferred scenario because it comes with its own startup momentum. The team is responding to an important company leader’s BHAG. No one wants to get in the way of that BHAG. The non-preferred scenario is called the “DFA or bust” scenario. If the company will go out of business unless costs are reduced by 50 percent, what have you got to lose? Pressure will be immense, since everyone’s job is on the line. You’ll surely have everyone pulling the boat in the same direction-DFA or bust!
2. Design Engineers Must Experience the Production Line
Design engineers believe the last product they designed is infinitely good. Just ask us. We believe that the product functions well and is easy to assemble. Customers know the product doesn’t function perfectly (that’s a discussion for another time), and manufacturing knows the product is difficult to assemble. But, design engineers rationalize the assembly weaknesses by claiming, “Manufacturing builds them every day, so it must be easy.”For a successful DFA program, a company’s design engineers must be convinced there is room for improvement. However, no amount of discussion or argument will accomplish this task. It takes firsthand experience to convince a design engineer that his or her design is substandard from an assembly standpoint.
Firsthand experience is obtained only on the production floor. Send your design engineers out to the floor to build a baseline product under production conditions. Production tooling and production documentation must be used, and production build times must be adhered to.
When the design engineers come back to their desks, tired and bloodied after their experience building the baseline product, the convincing is almost complete. The design engineers will have a newfound respect for assembly workers and newfound disrespect for the baseline product. It’s now time to complete the convincing phase by exploiting their “data-driven approach to life.” Ask them to create a simple Pareto chart describing a product’s part count by part type.
The first step in creating the chart consists of having the design engineers identify part types, or categories, for the various components that make up an assembly, such as fasteners, connectors, interface-protection components, main parts, and labels. The design team then should assemble the baseline product (again), count each part and assign each part to a type. This process is painstaking, but well worth the expense.
Once the Pareto chart is complete, the design team can start trying to figure out how on earth so many parts were stuffed into the product while they weren’t looking. The team now has a signature and an objective measure of the baseline design. As a result, the plan of attack becomes clear.
For example, in the case of the main power supply subassembly of a Hypertherm plasma cutting system, about 80 percent of the parts were either fasteners or connectors, so our approach was to reduce the number of these parts first. It comes as no surprise that fasteners and connectors are the first place to attack, but thanks to the Pareto chart, the design engineers now have hard data to work with, as opposed to just a hunch. With good data at their side, the design team is ready for the real DFA training.
3. An Explicit Part-reduction Goal of 50 percent Is Ideal
A simple goal goes a long way toward focusing a DFA project, and without a doubt, a part-count reduction goal is the best place to start, for two reasons. First, part-count reduction is the mechanism for eliminating labor content. There is no design tool that takes labor content out of a product. Instead, reduced labor content is the result of something-part-count reduction. DFA takes parts out of the product, and reduced labor content follows.The second reason for focusing on part-count reduction is that it is easy to measure and people can understand it. To start a successful DFA program, no other goals are required.
The DFA leader must now walk the walk. With a stiff upper lip and a straight face, the leader must actively promote the mantra: “Take out 50 percent of the parts.” Since the Pareto chart tells you the number of parts in the baseline product, you can translate this 50 percent reduction mantra into an explicit number of parts. In the case of our plasma cutter power supply, the first baseline product had about 1,000 parts, so everyone on the design team knew exactly how many parts the new design was going to have-500. At every opportunity, at every turn, at every meeting, in the cafeteria, while on a lunchtime run, ask the designers how many parts the new product will have.
Bear in mind that the design team will still think you’re off your rocker, because they continue to believe that no one can take 50 percent of the parts out of a product. The best way to get past this phase is to acknowledge that, yes, you’re out of your mind, but that you’re going to train them in DFA anyway. At the first flare-up of discontent, you can always ask the disgruntled engineers if they have a better idea. That usually silences them until their training is complete.
4. Reducing Part Count Eliminates More Waste Than You Think
Non-value-added (NVA) activities, or waste, or activities the customer will not pay for, are best understood by those lean thinkers who lead the daily crusade against NVA activities. Lean thinkers have both the mindset and the toolbox to eliminate NVA activities throughout the organization, which are defined as the “seven wastes” by Taiichi Ohno in his book Toyota Production System: Beyond Large-scale Production. It’s common for NVA time to make up more than 95 percent of the time in the value stream. This is why huge timesavings are realized even with modest percentage reductions in NVA time.Historically, design teams have been isolated from lean initiatives, and part-count reduction efforts have not been part of the lean equation. However, it is amazing to imagine the savings that might occur if design teams were involved in the overall lean strategy. Their input would result in fewer parts to overproduce, fewer parts to make wrong, fewer hours to wait for late parts, fewer parts to ship, fewer parts to receive, fewer parts to move, fewer parts to store, fewer parts to handle and fewer opportunities for incorrect assembly.
If you open up your mind, the list broadens further: fewer suppliers, fewer supplier qualifications, fewer late payments, fewer supplier quality issues, fewer expensive black belt projects. Most important of all may be the reduction in transactions associated with reduced part count, such as work-in-process tracking, labor reporting, material cost tracking, inventory control and valuation, BOMs, backflushing, routings, work orders and engineering changes. So, focus on part-count reduction!
To close this line of thinking, let me misquote a good friend: “As a design engineer, I can design more waste into a value stream in one afternoon than a sea of lean thinkers can take out in a lifetime.”
5. Floor-space Productivity Is a Measure of DFA Success
A breakdown of product costs, based on average costs calculated across hundreds of products, will typically show that parts make up 72 percent of total cost, while overhead makes up 24 percent of cost and labor makes up just 4 percent. Clearly the labor cost component is small, although that doesn’t stop many people from becoming fixated on labor savings.
In terms of overhead, each company calculates its costs differently, and the calculations are usually artifacts of traditional cost accounting practices and have limited physical interpretation. Frankly, these calculations confuse the hell out of me. Overhead cost is a business metric that is far removed from the actual activities occurring on the production floor. What is needed is a straightforward process metric that is easy to understand. Floor space productivity (FSP) is a good one.
FSP is defined here as the profit dollars shipped per unit time divided by the floor space required to achieve the profit. If the time interval is one day, the units of FSP are dollars per day per square foot.
Floor Space Productivity (FSP) = profit per unit time/required floor space
FSP is a simple metric that has a clear interpretation. Everyone understands that increased profit is good, and everyone understands how to measure floor space. Profits and floor space are usually well known or are easily calculated. FSP is a good metric for evaluating the effectiveness of a DFA initiative, because it captures profitability and the required factory size in one metric. Manufacturers that increase FSP can avoid the purchase or construction of a new factory. We should assess the effectiveness of our design teams using the FSP metric.
So, how much floor space is required for product A versus product B, and how do you reduce the required floor space? A good rule of thumb is that the required floor space scales with the work content (value-added activities, VA) and waste (non-value-added activities, NVA) associated with assembling the product:
In terms of overhead, each company calculates its costs differently, and the calculations are usually artifacts of traditional cost accounting practices and have limited physical interpretation. Frankly, these calculations confuse the hell out of me. Overhead cost is a business metric that is far removed from the actual activities occurring on the production floor. What is needed is a straightforward process metric that is easy to understand. Floor space productivity (FSP) is a good one.
FSP is defined here as the profit dollars shipped per unit time divided by the floor space required to achieve the profit. If the time interval is one day, the units of FSP are dollars per day per square foot.
Floor Space Productivity (FSP) = profit per unit time/required floor space
FSP is a simple metric that has a clear interpretation. Everyone understands that increased profit is good, and everyone understands how to measure floor space. Profits and floor space are usually well known or are easily calculated. FSP is a good metric for evaluating the effectiveness of a DFA initiative, because it captures profitability and the required factory size in one metric. Manufacturers that increase FSP can avoid the purchase or construction of a new factory. We should assess the effectiveness of our design teams using the FSP metric.
So, how much floor space is required for product A versus product B, and how do you reduce the required floor space? A good rule of thumb is that the required floor space scales with the work content (value-added activities, VA) and waste (non-value-added activities, NVA) associated with assembling the product:
Required floor space scales with VA activities + NVA activities
Here’s a sample calculation to explain this rule of thumb. First, determine the takt time, or the time needed to produce a product in order to meet demand (D):
Takt time = number of available hours/D
Assume the demand is six units per day and there are 6 available work hours per day. Therefore, D = 6 and number of hours = 6:
Takt time = 6 hours/6 units = 1 hour
The number of assembly stations required to meet demand is defined by the following equation:
Number of assembly stations = (VA time + NVA time)/takt time
Assuming VA time + NVA time = 10 hours, given the derived takt time of 1 hour, we get the following equation:
Number of assembly stations = 10 hours/1 hour = 10
Now assume that each of the 10 assembly stations requires 100 square feet of space. Total required floor space will be:
Required floor space = 10 stations x 100 square feet per station = 1,000 square feet
Now, to demonstrate the rule of thumb that floor space scales with VA time + NVA time, recalculate the whole mess for a product with the same demand, but with 5 hours of VA + NVA time, a 50 percent reduction. Takt time is still 1 hour, because it’s purely a function of demand. But, the equation for the number of stations becomes:
Number of assembly stations = 5 hours/1 hour = 5
Using this result, the required floor space becomes:
Required floor space = 5 stations x 100 square feet per station = 500 square feet
As is the case with NVA time and activities, floor space reduction is at the end of a causal chain where a reduction of floor space results from a reduction of work content and waste associated with assembly of the product, which in turn results from part-count reduction. So if you reduce part count, you reduce VA and NVA activities and, ultimately, floor space.
6. Before-and-After Metrics Sustain DFA Momentum
The key to sustaining the momentum of a DFA program can be as simple as a set of before-and-after charts presented to the management team at the conclusion of every project. The three most important before-and-after comparisons, in order of importance, are product cost (labor, material, overhead), assembly time and part count. At Hypertherm, we were able to chart part-count reductions of 47 percent to 63 percent. Keep track of metrics and especially successes. Make these successes easy to understand and appreciate. With luck, that big hairy audacious goal might pave the way to greater efficiency and smart product design for years to come.Editorial Note: This article was based on a paper presented at the 2006 International Forum on Design for Manufacture and Assembly, sponsored by Boothroyd Dewhurst Inc. (Wakefield, RI). For additional information, visit www.dfma.com, or call 401-783-5840.
