Implementation of Concurrent Engineering in Small and Medium ...

In: Advances in Concurrent Engineering. Proceedings of the 8th ISPE International Conference on Concurrent Engineering: Research and Applications. West Coast Anaheim Hotel, California, USA July 28 - August 1, 2001. S. 57-63

Implementation of Concurrent Engineering in Small and Medium Companies René Stach, Frithjof Weber Product Development, Process Planning and Computer Support, Bremen Institute of Industrial Technology and Applied Work Science (BIBA) at the University of Bremen, 28359 Bremen, Germany Glendon Price, Kulwant Pawar, Richard Barson, Svetan Ratchev School of Materials, Mechanical and Manufacturing Engineering & Operations Management, University of Nottingham, University Park, Nottingham, NG7 2RD, UK

Abstract Concurrent Engineering has mainly been implemented in large companies during recent years. Small and medium enterprises (SMEs) take place in the product development process of these large companies as e.g. second and third tier manufacturer, but approaches to introduce CE philosophies to these companies and within their immediate supply chains are few. This paper describes the approach taken during a European research project to implement and support CE in small and medium enterprises in the aerospace sector. It outlines the different CE actions carried out in five different companies in Germany, Great Britain, and Italy, and summarises the main results of the implementation process, and from these results conclusions can be drawn as to the success and validity of the assessment methodology and project validation.

1

Introduction

Many success stories describe the benefits which have been gained by introducing Concurrent Engineering in aircraft development. However, most cases focus on the implementation in large organisations. With long production chains in these organisations, there is a high potential to shorten the entire chain and thus the time-tomarket. On the other hand, small and medium enterprises (SMEs) usually have short production chains, but are integrated, work co-operatively with large companies this has practice has been established and developed during recent years. This is also a major -but often unattendedaspect of CE, that is changing the outlook from Concurrent Engineering (reduction of time to market) to Concurrent Enterprising (enabling high integration among project partners) [1]. This is the theory behind the project CEPRA (Concurrent Engineering in Practice) which aims to bring Concurrent Enterprising to SMEs. The CEPRA approach was twofold: The project aimed at bringing CE to SMEs through a combination of

personal consulting and use of a software system at the same time. Personal consulting support helped to implement CE principles within the participating companies by carrying out a CEPRA pilot project. CE awareness and CE knowledge was transferred to industrial partners by universities and consultancies assisting during the defined pilot project. The software gave an instrument to the industrial partners and the consultants as well to measure CE performance and to support all CE activities within the company. Knowledge about CE tools and methods was taught.

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CEPRA Software

The CEPRA Consulting Software System [2] consists of three parts. The first part is the Assessment Module (AM) assessing the SME’s CE performance and identifying problems in the CE domain, the assessment methodology specifically to suit the parsimonious culture so often found within SME’s . The second part is the Solution Identifier Module (SIM) retrieving appropriate solution cases. The third part is the Tool selection Module (TSM) providing information about CE tools and methods [3, 4]. The AM assesses the SMEs’ CE performance and optionally benchmarks it against other companies or best practice assessments of different branches. The assessment starts with approx. 50 initial questions and presents a quick provisional result. Assessment results are given for the SME’s Organisational Structure, Business Strategy, Process and Equipment, Technology Deployment, Knowledge and Skill Base as well as Human Empowerment. After a possible benchmark, the user decides which area(s) he wants to focus their attention on. A second questionnaire goes into detail within the specified area(s) and gives an assessment of the following CE principles: continuous improvement, customer and supplier focus, integration, information flow, parallelism and standardisation (each questionnaire contains approx. 50 further questions). Here again the user can benchmark his

3

CEPRA Pilot Approach

The pilot projects have been carried out in aeronautic SMEs in Germany, Great Britain, and Italy accompanied by human consulting and assistance in applying the CEPRA software. Figure 1 describes the pilot projects’ different phases. The pilots projects started with an introduction and awareness raising sessions for all the pilot project partners about CE principles, explaining what CE means, and how it can be implemented. Taking into account experiences and guidelines from research and industry (see References) the

next three phases were accompanied by the CEPRA software which helps to support an implemented solution for an identified problem. The implementation phase was carried out by the pilot partners in co-operation with consultants to put the identified solution into practice. After implementation the companies were re-assessed, again using the CEPRA software. In addition to this re-assessment predefined common performance metrics were re-measured and compared with the initial values before the project.

Assessment

Consultant Support & Awareness Raising

results against others and/or best practice values. The entire data of his assessments is then sent to the second module. See also [5]. The SIM retrieves study cases that help to improve the SME’s former assessment. Therefore, this module is based on a database with (currently) about 70 study cases that are rated against the same criteria as in the AM. The software now compares the cases data within its database with the assessment values of the SME and tries to find the most similar cases. Each retrieved study case is broken down into basic interventions (actions that have been performed in the study case) and the study case and the interventions are presented to the user. Each of the interventions is linked to a method or tool that is deemed to be helpful to put the solution within the study case into practice. This link can be done in two ways: The first way is a direct link to the required information in the TSM, the second way will activate the search engine of the TSM which will retrieve all tools and methods that deal with the specified keywords. The TSM provides information about approx. 500 tools and methods that are related to CE. Furthermore, a powerful search engine offers various options for tool and method retrieval. E.g. besides usual conjunctions (AND, OR) the search engine searches plural and singular meanings as well as different parts of speech (noun, verb, adverb, etc.). The socalled fuzzy search finds words that sound similar to the search keywords. Synonyms are supported as well. The retrieved tools and methods come along with a short introduction, a view from a CE basis, quick criteria like price and estimated quality etc. A detailed description is provided including examples, pictures, animations, presentations, further documentation, and additional information sources (providers, journals, books) are linked. Summarising the functionality, the CEPRA Consulting Software System analyses the SME’s CE performance, identifies weaknesses, provides study cases whose implemented solution can overcome the weaknesses and gives information about tools and methods to put the retrieved solutions into practice.

Solution Identification

Tool & Method Selection

Implementation

Figure 1 – Pilot Case Approach

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Pilot Cases

This section describes the actions that have been undertaken in the different pilot companies. This information is crucial to understand the impact of the pilot cases on the overall company and thus on the common performance metrics. 4.1

Pilot 1

Pilot 1 was founded in 1985. With a central aim to develop systems for use in the fields of measurement and control technology, it now has a staff of approximately 135 highly skilled employees working primarily on applications for advanced technology in the aerospace sector. The company focuses on design and development of real time data acquisition and processing systems for use in airborne platforms, the design and integration of aircraft modifications, and the conduct of special mission aircraft operations in privatised environments. The company is a specialist in all applications of airborne realtime data acquisition and processing. The turnover in 2000 has been about 20 million €. In the beginning of the project, Pilot 1 was using

different software tools for different departments and for different functional levels within these departments. For example, own project management software (time and resource management) based on a dBase database running under DOS was used. The user interface for this was the project scheduling software PS5 by Scitor. Furthermore, the financial calculation/controlling and accountancy software Diamant II based on MS SQL Server was used. During the assessment it was found out, that primarily these software tools were sharing much data and data was stored redundantly, often causing inconsistencies. Furthermore, data often had to be exchanged between different departments since needed data was not accessible. Therefore, these databases have been integrated to ensure consistent data and to ensure that needed data is accessible where it is needed. Thus, Pilot 1 could improve project planning and control and the organisation of project data and documents. 4.2

transfer between sites, and re-prioritisation of jobs at both sites. Clearly in the new re-organised internal company supply failures from Biggleswade would impact quickly on Ratby performance in terms of both financial and customer satisfaction. Elimination of these supply failures was therefore highlighted as the key task in the project. To achieve this or at worst to minimise supply failures, the following were identified as having maximum potential impact. 1. Labour recruitment at Biggleswade 2. Information transfer from Ratby to Biggleswade. 3. Implementation of a production planning process. 4. Acceptance and adherence to the production plan at Biggleswade. 5. Process monitoring at Biggleswade and implementation of corrective action. 6. Management of change to ensure the above are smoothly implemented.

Pilot 2

Pilot 2 is a manufacturer of special cutting tools for the aerospace industries. These tools are known as broaches, the machines on which broaches are used as broaching machines. The company also manufactures the machines which sharpen broaches and a full range of fixturing and holders for use on broaching machines. In addition the company offers services related to broaching to industry, namely broach regrinding, sub contract broaching and sub contract high speed steel heat treatment. The annual turnover of the company is about 9 million € per year and it employs about 130 people. Pilot 2 operated from 3 sites, 2 at Ratby in Leicestershire and 1 at Biggleswade in Bedfordshire. Product demand patterns and various financial issues led the Board in a strategic review to conclude that the closure of one of the Ratby sites and subsequent product consolidation on to the remaining 2 sites would bring significant benefits in terms of competitiveness and customer satisfaction. In operational effect this meant that there was an increased need for inter site dependence and supply of part finished (mid production) products from the Biggleswade site to Ratby. From by the CEPRA software, several cases were identified which were combined and used to form the majority of the pilot implementation plan. Product lead time is a key requirement of Pilot 2’s market place and it was recognised that in the new organisation there was a risk of failing to meet delivery times unless a structured task approach was implemented. Highlighted was the requirement for a project and production planning and communication system that was accessible from both sites. Also included were issues of labour recruitment, job

The majority of the pilot project carried out at Pilot 2 was concerned with the IT and communication issues resulting from the proposed changes. The schedule for these were to have functional systems in place by mid 2000 but with ongoing detailed development until the end of first quarter 2001. Although primarily the pilot project 2 was based on technological improvements, the consulting support made great efforts to ensure that the involved company was aware of the importance of the cultural issues on going throughout the project. The authors believe that the steps taken with these issues in mind contributed significantly to the success of pilot project 2. The major difficulty encountered when developing the implementation plan was the combination of maintaining operating efficiency whilst at the same time committing adequate resources to the CEPRA pilot project. This was a problem anticipated in many SME’s, but despite the complications caused, the importance of the improvements ensured the project stayed on track. As a means of closely monitoring the project it was decided that a regular reporting procedure would encourage continual focus on the project and also enable the project driver to keep tight reigns on the project tasks. 4.3

Pilot 3

Pilot 3’s core activities are product design, development and innovation, 3D solid modelling; including CATIA and Unigraphics which are used to provide a manufacturing capability, and also rapid prototyping. Pilot 3 has over 80 member companies in U.K and Europe, and also has a dissemination network of

over 120 aerospace companies. The main problem areas consist of: • Limitations of existing CAD/CAM software • Excessive lead times • Slow reaction to implement design changes • Little consideration of manufacturing requirements on new designs • Over the wall engineering techniques Pilot 3 was concerned with the identification and implementation of a new CAD/CAM software package capable of: 3D parametric solid modelling, creating program files for laser and milling machines, automatically update of detail drawings and machine programs if master part is modified, enabling information exchange within the project team/shop floor and external customers to encourage parallel working, and expanding in conjunction with the rapid growth of the company. The formulation of a project implementation team was a key factor in the success and continual driving force applied in pilot 3. Knowledge of manufacturing processes, both internal and in suppliers and sub-contractors, were essential in order to gain the downstream benefits that most CE systems can offer. Knowing the media and data formats that those processes would support was also important. CAD and the sharing of data can have an impact on the whole of the product introduction process from concept through to manufacture, so the team must have an in-depth insight into the whole process. In reality constraints within the IT environment would affect the implementation. Workstation types, networking, and operating systems were to be considered. It was therefore vital that a decision-making representative from IT was included in the team. It was of prime importance that in order for the project to receive financial support from senior management perceived benefits and measurements were clearly defined and detailed at the start of the project. The specific results that the Managing Directors required were: • Reduction in time from inquiry to detailed production quote • Reduced effort from design to manufacture • Reduction from quote acceptance to start/ completion of manufacture • Improved communication between design/ shop floor (production) and finance • Simplified access to product data The successful completion of the pilot project has enabled the integration of functions at all levels within and between organisations. Using CE principles has proved to make manufacturing engineers more productive. It has enriched their jobs, upgraded the nature and content

of more traditional job functions, and improved the quality of working life for engineers, designers and managers. This has empowered staff and allowed for a flatter organisation structure. The manufacturing staff now feels part of the design and development team, whereas in the past there had been a visible divide. Often it was the case, that manufacturing staff would complain amongst themselves regarding difficult to manufacture designs which in most cases were never relayed back to the designer. Gradually this problem is becoming less and less apparent. All these changes in culture and technology have proved to provide direct savings against the original outlined specific project metrics. 4.4

Pilot 4

Pilot 4 is an engineering office for three-dimensional computer-aided design (3D-CAD), stress analyses with the Finite Element Method (FEM), strength justifications and certifications of structures according to the rules of different authorities. The company today employs 23 engineers and technicians. The turnover in 2000 has been approx. 1.74 million €. The analysis of internal processes at Pilot 4 showed up that administrative actions concerning especially the process of bidding, project management and accounting have not been integrated. The solution was to integrate different tools by setting up a common database and customising the used tools and their databases to ensure a smooth process transforming orders into projects and afterwards to carry out the accounting. Furthermore, all data should have been made available for employees by remote access. However, due to lack of time and resources this aspect has been postponed. 4.5

Pilot 5

The Pilot 5 activities in the aeronautic field are strongly related to supply skills to the customer and in a fast growing way to manage complete projects. These projects are increasingly complex. A typical project is the full development of a CAD/CAE design for an aeronautic structure or activities in complementary fields like avionics or antenna design. Pilot 5 also acts in the automotive sector. The pilot was focused on the improvement of the bidding process, aiming at increasing the confidence in correct evaluation of customer requirements and the effectiveness in anticipating engineering issues for the actual supply. This was done by introducing the concepts of Integrated Product Team in the offer phase. By involving both commercial and technical personnel in a joint team to

prepare the offering, and required the development of innovative work procedures to enact increased information exchange and co-operative decision making in the bidding phase.

5

Comparison of the Pilots

Besides the actual assessment results from the software, additional benchmark criteria have been defined to measure the success of all pilot cases and compare them to each other. These criteria are: • Inquiry turnaround time • Adherence to due date • Lead time • Actual versus estimated profitability • % of non value adding activities Trying to measure these criteria, the pilot partners faced severe problems. As it is possible, for example, to measure the adherence to due date, the measured figure has to be set into relation with the duration of the due work. A delay of one week may be not relevant to the entire design of an aircraft but may be crucial in a stress analysis that has to be provided to a designer. A further problem in measuring was that the impact of the CEPRA pilot projects could not be isolated from other external influences due to the complexity of the pilots. Furthermore, it was not possible to measure an unequivocal value for the non value adding activities. Thus, these criteria are not presented quantitatively, but instead the involved pilot project managers gave their qualitative assessment in terms of the specified criteria significantly deteriorated (--), slightly deteriorated (-), did not change (O), slightly improved (+), or significantly improved (++).

Pilot 1 Pilot 2 Pilot 3 Pilot 4 Pilot 5

% non-value Turn around Due Date Lead time Profitability adding time 0 0 + 0 + + ++ + + 0 ++ + + + ++ ++ + + + -++ ++ ++ ++

Table 1 – Common Benchmark Results from Pilot Cases Additionally, it was experienced that the undertaken actions have been obvious but on the other hand the pilot projects influenced more than they were expected to do. So, one of the pilot project managers stated after the project: ‘I am not sure about what CEPRA really did. Of course, we know that what has been done in the pilot project. But I feel that there are much more initiatives that we have started and I doubt that we had started these

without CEPRA’. 5.1

Inquiry Turnaround Time

Three industrial partners experienced very good improvements in this metric, with Pilot 3 and 4 recording significant improvements. Both Pilot 1 and 2 claimed a good turnaround time already before CEPRA, and noticed slight improvements if any. One of the most prominent aspects is the deterioration experienced by Pilot 5 in terms of inquiry turnaround time. Although this looks large in terms of negativity, in reality it translates to an increase of only two days. This increase allowed Pilot 5 to dramatically improve their performance in three of the other four metrics, and experience significant improvements in the fourth. 5.2

Adherence to Due Date

Every company, with the exception of Pilot 1, has improved its adherence to due date. In both cases where little improvement was noted, both Pilot 3 and 4 had a high adherence before the project and therefore minimal improvements are a major step. Pilot 1 noticed no improvement in this area due to the CEPRA project. Pilot 5 experienced the largest improvement, this was attributable to a major reduction in the number of projects that are delayed from original estimations. This is an excellent example of CE in practice, where spending more quality time in the design and planning stages of projects greatly improves stages of production at later stages in the product cycle. 5.3

Lead-time

Lead-time has improved across all the projects, with all companies noticing reductions, with one company recording significant reductions. These improvements in lead-time will both increase the customer satisfaction and in the long run lead to greater order volumes. Prior to CEPRA, Pilot 3 considered lead-times to be one of their major strengths. Whilst achieving a slight reduction they believe far greater improvements will be seen in product functionality and quality. Pilot 1 has noticed a small improvement in lead-time, which is impressive as the volume and complexity of products has also increased at the same time. 5.4

Actual versus Estimated Profitability

Three companies, noticed improvements in this metric, with Pilot 5 again noticing the greatest improvement. Pilot 4 experienced a negative effect in their profitability, this

was attributed to the growth of staff, whilst estimations of profitability took no account for this staff increase, therefore the relation between estimated and actual profits deteriorated. Several of the companies involved questioned the choice of the metric as they have not really had adequate time to experience or accurately estimate the impact of CEPRA on this metric. 5.5

Non-value Adding Activities

The great improvement noticed in this metric was experienced by Pilot 3 that reported a massive improvement and is a direct result of the almost complete removal of the need for sub-contracting processes. Pilot 4 as well experienced a very significant improvement. Pilot 1 and 4 both noticed small reductions in non-value adding activities with Pilot 1’s improvements coming from more effective communications with third parties. Table 1 gives an overview about the common performance assessment and shows how the pilots improved or deteriorated during the CEPRA pilot projects. From discussion with the pilot project managers it could be seen that average company improvements varied greatly with four of the five companies averaging what can be defined as ‘a significant improvement’. The greatest average improvement was experienced at Pilot 3, however as stated before, this can in the main, be attributed to the almost complete reduction in requirement for sub-contacting work, which was well picked up by the common performance metrics.

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This work has been partly funded by the European Commission through ESPRIT/Brite EuRam Project No. EP 29365 CEPRA - Concurrent Engineering in Practice Demonstrating the Innovative Development of Aircraft Components in Small and Medium Enterprises. The authors wish to acknowledge the Commission for their support. We also wish to acknowledge our gratitude and appreciation to all the CEPRA project partners for their contribution during the development of various ideas and concepts presented in this paper.

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[2] [3]

[4]

[5]

Conclusion

The application of the CEPRA system confirmed the CEPRA approach. Concurrent Engineering can definitely be implemented in small and medium enterprises successfully. Four of five companies experienced significant improvements whereas one company slightly improved in an environment that became more complex during the pilot case. Except this partner all others also stated that CEPRA was a win for the company and influenced the entire company more than it has been expected. Many actions of the key personnel who has been involved in CEPRA is now guided by Concurrent Engineering principles. The CEPRA software approach has been validated through the pilot projects. Besides technological problems the software performed well and brought out good results. The software approach has been confirmed, indeed the need raised for a larger basis of case studies and tool and method descriptions in the repositories. This lies in the fact, that the pilot partner sometimes did not find any case study or tool that was relevant to their problem.

Acknowledgement

[6] [7]

[8]

[9]

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