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Lost Production in Manufacturing

Automotive and other manufacturers rely on integrated production lines, tooling and other assets to produce products to sell. This article addresses some of the issues that may affect the ability of assets to perform.

A production line or manufacturing cell that has been installed to manufacture products in a factory often includes a number of different types of machines that work in sequence to produce a finished part. Each step must perform perfectly for the next step to in turn perform its operation. Likewise, each step must perform at least at the specified cycle time or production rate for the next operation to perform at its specified rate. After all the steps, the finished part is sometimes introduced into yet another manufacturing line to become part of an assembly that includes other finished parts. An assembly could be a simple product, such as a shovel or a broom, or it could be a complex one like a complete automobile. Each and every part and sub-assembly must arrive at the next step in the process, at the shape, hardness, color, condition, or other specifications that are required for the next step to proceed.
Consider the theoretical example of a brand new 10-station production line specially designed and built by a machine tool builder to manufacture complex, precision metal parts from sheet steel. Our theoretical production line is fully automated, except for one station at the midpoint of the operation that is loaded manually, and whose machine requires frequent replacement of cutters that become dull during operation. When everything is operating optimally the production rate of the entire line is 900 units per hour, the specified rate at 100% efficiency. Each finished part is valued at $10. Consider that the cycle time at 900 per hour is theoretically capable of producing 15 parts per minute of operation, thereby effectively generating goods worth $150 per minute or $9,000 per hour. At the end of the day, our theoretical production line could produce 7,200 units in 8 hours, but the net yield is only 2000, and day after day the line struggles to produce any more than 2,400 units, with scrap exceeding 10% of production. What's required to get this system to work as planned? Is it time to call the lawyer?

There are a number of factors that are required for the above theoretical production line, or any typical production line, to achieve its specified output at the specified quality, including:

• Appropriate machinery and tooling must have been selected and provided for the job, that is capable of reliably maintaining the specified cycle time;
• Uninterrupted supplies of cooling water, lubrication, compressed air, electricity, and other supplies at the proper quality, temperature, pressure, voltage, etc.;
• Proper foundations or other modifications to the appurtenant structure specified by the supplier(s) of the equipment, or as traditionally provided for the manufacturing process;
• Uninterrupted supply of incoming material at the specified quality and dimensions;
• Properly trained operator(s);
• Operators who possess sufficient strength, stamina and skill to perform their tasks without interruption;
• Uninterrupted staffing of the manual station at all hours and minutes of operation;
• Trained and qualified maintenance personnel available to make immediate repairs;
• Maintenance performed by skilled personnel on a schedule rather than during breakdowns;
• Spare parts in stock for immediate replacement;
• Fully debugged, reliable tooling;
• Proper tooling setup and adjustment;
• Spare tooling on hand for immediate replacement;
• Tooling manufactured to specifications;
• Skilled tooling setup personnel;
• Tooling replaced or rehabbed on a schedule based on accumulated experience to minimize or eliminate downtime during productive periods;
• Documentation of dimensions or other characteristics of parts produced during intermediate stages; and
• Provisions in the facility to remove the produced capacity from the end of the line on an uninterrupted basis.

Each portion machinery and equipment must be capable of reliably cycling at the desired gross production rate of, in this example, 900 times per hour. The net production rate will generally be less. The user of the machinery is typically responsible for providing the necessary management and infrastructure to efficiently support the operation.

During investigations of complaints of lost production, whether at the request of management or in relation to litigation for breach of contract, I typically consider the above and other factors. My analysis typically includes review of such items as specifications, quotations, contracts, machinery drawings, product drawings, tooling drawings,, the facility in which it has been installed, inspection procedures, maintenance procedures, and incoming raw materials. I typically conduct an onsite inspection of machinery and tooling, to the extent that it is available, including making photos and/or video tapes, precision measurements of machinery, checking hydraulic pressures and other settings, temperatures, and other variables that may affect the output or reliability of the system. Some investigations require records of uptime, downtime, maintenance, worker training, qualification and availability, and other factors. Matters may involve a comprehensive design review of certain portions of the equipment, including calculation of design elements and tooling design parameters.

Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.For specific technical or legal advice on the information provided and related topics, please contact the author.

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